An assignment may take one of two forms: an absolute assignment or a collateral assignment. Whether an assignment is absolute or collateral depends on whether the assignee has received complete ownership of the policy or only certain specified ownership rights in the policy.
Absolute Assignment. An absolute assignment of a life insurance policy is an assignment under which a policyowner transfers all of his policy ownership rights to the assignee. The policyowner-assignor has no further rights under the contract, and the assignee becomes the policyowner. In general, a policyowner can absolutely assign a policy to anyone, regardless of whether the assignee has an insurable interest in the life of the insured.