The life insurance contract, with its valuable prematurity rights and promise to pay a specified sum of money upon maturity, is an ideal form of collateral for credit transactions. Hence it is not surprising that the practice of assigning life insurance policies as collateral security has reached large proportions. Policies are, in addition, frequently assigned as a means of transferring ownership rights to another person or organization. It is important to note the circumstances under which a life insurance contract can be assigned and the manner in which the rights of the various parties involved are affected by the assignment.