The transfer of duties and rights in an insurance policy from one policyowner to another is called

• A. endorsement
• B. alienation
• C. novation
• D. assignment

Answer: (D)

Assignment is the transfer of the policy’s ownership rights and duties from one person to another. When this happens, the new owner takes over the rights to pay premiums, name beneficiaries, and receive proceeds. There are two common forms: absolute assignment (the new owner holds all rights) and collateral assignment (the transfer serves as security for a loan, while the insured may still control the policy). The insurer must be informed to update records and recognize the new owner.

Endorsement changes terms or adds riders but doesn’t transfer ownership. Novation replaces the contract with a new one, extinguishing the old agreement. Alienation is a general term for transferring property, but in insurance the specific term for transferring policy ownership is assignment.