Which of the following statements is TRUE about a policy assignment?

The correct statement regarding policy assignment is that it transfers rights of ownership from the owner to another person. This process allows the policyholder to designate someone else as the new owner of the policy, which can be useful in various financial and estate planning situations. Assigning the policy does not alter the terms of the insurance contract; it merely changes who holds the rights and responsibilities associated with the policy.

The other options are less accurate in their descriptions of policy assignments. For example, an assignment does not lead to the cancellation of the policy; instead, it simply changes ownership while keeping the policy active. Furthermore, policy assignments are not limited to term life insurance but can apply to various types of life insurance policies. Lastly, while some assignments may be revocable, it is not universally true that they can be revoked at any time without notice, as specific contractual terms or state laws may impose limitations on this.