Which type of assignment allows the policyholder to retain some rights while giving others temporarily?

Which type of assignment allows the policyholder to retain some rights while giving others temporarily?

• A. Absolute assignment
• B. Collateral assignment
• C. General assignment
• D. Partial assignment

Answer: (B)

The correct choice is collateral assignment. Collateral assignment involves the policyholder transferring partial ownership rights of an insurance policy to a lender or another third party, often as security for a debt, while still retaining certain rights associated with the policy. This arrangement allows the policyholder to use the policy as collateral without surrendering full ownership, which means they still have rights such as naming beneficiaries or making changes to the policy. In contrast, absolute assignment typically involves full transfer of ownership rights to another person or entity, meaning the original policyholder relinquishes all control over the policy. General assignment is a broader term that might not specifically apply to insurance policies in the same way, and partial assignment isn't a formal term commonly used in insurance contexts regarding ownership rights.

The correct choice is collateral assignment.

Collateral assignment involves the policyholder transferring partial ownership rights of an insurance policy to a lender or another third party, often as security for a debt, while still retaining certain rights associated with the policy. This arrangement allows the policyholder to use the policy as collateral without surrendering full ownership, which means they still have rights such as naming beneficiaries or making changes to the policy.

In contrast, absolute assignment typically involves full transfer of ownership rights to another person or entity, meaning the original policyholder relinquishes all control over the policy. General assignment is a broader term that might not specifically apply to insurance policies in the same way, and partial assignment isn't a formal term commonly used in insurance contexts regarding ownership rights.