Who is authorized to assign a life insurance policy as collateral for a loan?

The policy owner is the individual or entity that possesses the rights to a life insurance policy, which includes the authority to assign the policy as collateral for a loan. This assignment is a legal right granted to the policy owner, allowing them to use the cash value or death benefit of the policy to secure a loan, often for purposes such as financing personal needs or business expenses.

This capability stems from the principle that those who own the policy have control over its features, including rights concerning beneficiaries, premium payments, and assigning the policy. In the event of an unpaid loan, the lender could claim against the insurance policy's value to satisfy the outstanding debt, making the assignment a significant financial tool for policy owners.

The other choices lack the necessary authority for assigning a policy. An insurance agent can facilitate transactions but does not possess rights over the policy itself. A beneficiary has a claim on the proceeds of the policy upon the policyholder's passing but does not hold rights to assign it. Finally, the insurance company has control over the administration of the policy but does not have the authority to assign it as collateral; that right is strictly reserved for the policy owner.