Final answer:
A policy owner can transfer ownership of their insurance policy either through an absolute assignment, transferring all rights and control, or a collateral assignment, which is a partial transfer used as loan security.
These transfers are subject to policy terms and state laws.
Step-by-step explanation:
Excluding life insurance, a policy owner may transfer ownership of their insurance policy under several conditions. These transfers, often governed by contractual agreements and state laws, can occur through an absolute assignment or a collateral assignment.
Under absolute assignment, the policy owner transfers all rights and control of the policy to another party. This might be done for several reasons such as estate planning, business agreements, or charitable giving.
A collateral assignment is typically a partial and temporary transfer of rights used as security for a loan; if the loan is repaid, the rights revert back to the policy owner.
It is essential to note that such transfers are subject to the terms and conditions of the policy itself and any applicable laws or regulations.