What does it mean when it asks if your life insurance policy is assigned?

It usually means that you have pledged or sold the end of life benefit from the policy to guarantee an obligation such as a loan. Otherwise, there is not much difference between an assignment and a beneficiary; You die, and the policy benefit gets divided up between the beneficiaries and assignees. Some insurance carriers don't make a distinction between the two.

Assignment rules vary among insurance carriers, so if you are being asked to make an assignment, you may want to ask your carrier first. In any event, the carrier will require that you make the assignment or beneficiary change yourself; a third party can't do it.