Texas Life Insurance Practice Exam

The term that refers to the transfer of ownership rights of a life insurance policy from one individual to another is "Assignment." This concept is crucial in the insurance industry as it allows the original policyholder to transfer their rights to another person or entity. This can include transferring the ability to make changes to the policy, receive policy benefits, or manage the policy overall.

Assignments can be absolute, where full rights are transferred permanently, or collateral, where rights are temporarily transferred as collateral for a loan. Understanding this concept is vital for anyone involved in life insurance, as it affects how policies can be managed and whose interests are at stake.

The other options represent different concepts within life insurance. An "Endowment" is a type of life insurance policy that pays out a benefit either at the end of a specified term or upon the policyholder's death, serving a different purpose. "Conversion" typically refers to the ability to change a term life policy into a permanent policy. A "Beneficiary change" involves altering who will receive the death benefit but does not involve transferring ownership rights. Each of these terms has its own specific implications in the realm of life insurance.