Which term refers to the act of exchanging insurance rights and responsibilities?

The term "assignment" refers to the act of transferring rights and obligations under an insurance policy from one party to another. In the insurance context, this means that the policyholder (the assignor) can transfer their rights to claim benefits or benefits themselves to another party (the assignee). This is particularly relevant in situations where someone wants to ensure that a third party can collect insurance proceeds, such as in a sale of property or in cases involving liens.

Understanding this concept is vital because assignments must be properly documented and may require the insurer's consent, depending on the terms of the policy. This ensures that the insurer knows who is eligible to receive the benefits of the policy and that the rights have been legally transferred to avoid disputes in the future.

On the other hand, other options do not accurately describe this action. "Codicil" relates to changes made to a will, "underwriting" involves the assessment of risk and determination of premiums for insurance policies, and "delegation" refers to the act of assigning tasks or responsibilities, but not necessarily the rights associated with an insurance policy.