PSI Ohio Insurance Practice Exam

All of the following are ownership rights EXCEPT?

1. Changing the beneficiary

2. Borrowing against policy cash value

3. Switching the policy from one insured to another

4. Nonforfeiture options

The correct answer is: Switching the policy from one insured to another

Ownership rights in an insurance policy refer to the privileges that the policyholder has over their own policy. These rights typically include options such as changing the beneficiary, borrowing against the policy’s cash value, and choosing among nonforfeiture options, which provide alternatives if a policy lapses. Switching the policy from one insured to another is not typically an ownership right because it involves changing the fundamental terms of the insurance contract. This kind of alteration usually requires the consent of the insurance company and may necessitate a new policy application or underwriting, as the risk assessment may differ between the original insured and the new one. Thus, it falls outside the standard ownership rights typically afforded to policyholders under their existing contracts. In contrast, the other options directly relate to actions that a policyholder can take directly with the insurer regarding their policy without needing significant alterations or approvals.