What Does It Mean To Assign Life Insurance? 
There are two types of assignment relative to life insurance . 1 -RRB- Absolute assignment . This is when the owner of the policy transfers ownership to another person , including all the rights to change the policy . E.g. . An absolute assignment might be used when parents have life insurance on their children , and wants their children to assume ownership of their own policies when they become adults . 2 -RRB- Collateral assignment . This is when a life insurance policy is used as temporary security for a loan . An assignment form usually is attached to the life insurance policy , authorizing the lender to collect the amount owed to them , should the insured person -LRB- borrower -RRB- pass away . The remainder goes to the Insured 's beneficiary named on the policy . 