What does the term "absolute assignment" refer to in insurance?

The term "absolute assignment" in the context of insurance specifically refers to the transfer of ownership of a policy. When an insurance policy is absolutely assigned, the original policyholder cedes their rights and interests in the policy to another individual or entity. This transfer is comprehensive and relinquishes all control and benefits associated with the policy to the new owner.

This is significant because it impacts who has the authority to make decisions regarding the policy, such as changing beneficiaries, borrowing against the policy's cash value, or ultimately canceling the policy. In contrast, other choices involve concepts that do not pertain to outright ownership transfer. For instance, the transfer of risk from one policyholder to another relates more to reinsurance or risk-sharing agreements, while calculating premiums and policy renewal strategies address different operational aspects of insurance policies rather than ownership issues.