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If there are any funds left once the debt has been satisfied, the rest of the proceeds go to the policy's beneficiary.
A policyowner has assigned a $10,000 policy to cover a $5,000 mortgage.
If the policy is transferred under an absolute assignment, the transfer is irrevocable and the assignee receives full control of the policy.
As long as the beneficiary was not designated as an irrevocable, the assignee can even change the beneficiary without the beneficiary's permission.
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Since the policyowner actually owns the policy, not the insurer, the owner has every right to give the policy away just like any other owned piece of property; the insurer's permission is not required.
The transfer of ownership is referred to as assignment and the new owner is the assignee.
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