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Life insurance is a contract. It is also personal
property. Because of these two factors, it can be
transferred to another person. Keep in mind, assignment is
sometimes prohibited in the insurance contract. However,
assuming that it is assignable, there are two types of
assignment.
The first is absolute assignment. Absolute assignment means that all ownership rights have been
transferred to another person.
The second type of assignment is collateral assignment. Collateral assignment means that only certain rights are transferred. Generally, this is used in situations where the life insurance policy will serve as security for a loan or some other type of debt.
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