What action must be taken to officially transfer ownership of a life insurance policy?

To officially transfer ownership of a life insurance policy, completing an absolute assignment is the necessary action. This process involves the current policy owner formally designating a new owner of the policy. An absolute assignment is a legal document that officially documents the transfer of ownership, transferring all rights and privileges associated with the policy from the assignor (original owner) to the assignee (new owner).

This action is essential because it ensures that the new owner has full control of the policy, including the ability to make decisions related to premiums, changes in coverage, and ultimately, the payment of the death benefit upon the insured's passing. It protects both the interests of the original policyholder and the new owner by creating a clear and legally binding record of the ownership change.

While legal papers might be necessary for various types of documentations in other situations, the specific requirement for transferring ownership of a life insurance policy is the completion of an absolute assignment. Notifying the beneficiary or sending a request to the insurance agent may be part of the communication process, but they do not constitute the formal transfer of ownership.