Which of the following statements concerning an assignment of a life insurance policy procured by the insured is correct?

• A. I only
• B. II only
• C. Both I and II
• D. Neither I nor II

Answer: (B)

When a life insurance policy is assigned, ownership rights move from the current owner to someone else. If the policy was procured by the insured, the insured is typically the owner at issue, unless ownership has been transferred previously. There are two main kinds of assignments: absolute, where all ownership rights are transferred, and collateral, where the policy serves as security for a loan or obligation. For either type, the assignment generally must be in writing and delivered to the insurer, and the insurer records the change in its records. The beneficiary designation can stay the same unless the policyowner also changes the beneficiary, so an assignment doesn’t automatically alter who receives the death benefit.

I’m missing the exact text of statements I and II, so I can explain precisely why the second statement is the correct one in this question. If you share what I and II say, I’ll tailor the explanation to show why the second statement fits the rules above.