When money is paid due to a change of ownership in a life insurance policy, what is this generally known as?

When money is paid due to a change of ownership in a life insurance policy, this is generally known as a "transfer for value." This term refers to the concept that when a policy is sold or transferred for compensation, the new owner may acquire certain tax implications, especially concerning the death benefit. Specifically, if the policy’s cash value or death benefit is transferred for something of value, it may be subject to taxation under certain circumstances, leading to the policy's proceeds being potentially taxable to the new owner.

The other options, while they might seem relevant at first glance, do not accurately reflect the specific legal and tax implications of transferring a life insurance policy for compensation. Concepts like "policy reassignment" or "ownership exchange" do not capture the nuanced taxation aspects and are not standard terminology used in the context of life insurance ownership changes. "Sale for profit" might imply a business transaction, but it doesn’t accurately describe the unique nature of life insurance transfers that incur specific tax consequences.