Among ownership rights in a life policy, which action is included?

• A. to exchange a policy for another policy.
• B. to rescind an absolute assignment.
• C. to reinstate the policy after a lapse.
• D. to elect settlement options.

Answer: (A)

The ownership rights concept centers on what the policyowner can directly control in the contract. Exchanging one policy for another is a clear owner action because it involves substituting the existing policy with a different contract to better fit current needs, often via a tax-advantaged exchange mechanism (like a 1035 exchange) or a policy conversion. This flexibility is a hallmark of ownership, allowing the owner to modify or upgrade the coverage without affecting the insured’s status.

The other options aren’t typical ownership actions: undoing an assignment involves reversing a transfer and usually requires agreement from the other party; reinstating after lapse is a reinstatement process tied to keeping or renewing coverage rather than changing the contract itself; and settlement options are typically chosen by the person who will receive the proceeds after a claim, not by the policyowner as a ongoing control action.