Final answer:
Ownership of a life insurance policy may be temporarily transferred with an absolute assignment. This allows the policyholder to secure a loan by using the policy as collateral.
Step-by-step explanation:
The correct answer is c) Absolute assignment.
Ownership of a life insurance policy may be temporarily transferred with an absolute assignment. In an absolute assignment, the policyholder transfers all rights, ownership, and control of the policy to someone else, typically as collateral for a loan or debt. The temporary transfer of ownership does not change the beneficiary designation, as the policyholder can still name a beneficiary to receive the death benefit.
For example, if the policyholder wants to secure a loan, they can use the policy as collateral by assigning it absolutely to the lender. If the policyholder fails to repay the loan, the lender has the right to take ownership of the policy and use its cash value to recover the debt.