California Life-Only & Accident and Health AgentCalifornia Law - Life and Accident & HealthMedium
A life insurance agent is explaining the beneficiary designation options to a client in California. Which of the following beneficiary designations would provide the LEAST flexibility for the policyowner to change the beneficiary in the future?
- ARevocable Beneficiary
- BIrrevocable Beneficiary
- CContingent Beneficiary
- DPrimary Beneficiary
Show answer & explanationAnswer & explanation
Correct answer: B. Irrevocable Beneficiary
An irrevocable beneficiary designation provides the least flexibility because the policyowner cannot change the beneficiary, assign the policy, or make policy loans without the irrevocable beneficiary's written consent. Revocable beneficiaries can be changed at any time by the policyowner.
Why the other options are wrong
- A. A revocable beneficiary can be changed at any time by the policyowner without consent.
- C. A contingent beneficiary only receives proceeds if the primary beneficiary is deceased, but the policyowner can still change primary or contingent designations if they are revocable.
- D. A primary beneficiary is the first in line to receive proceeds, but the designation itself (primary) does not dictate flexibility of change; only whether it's revocable or irrevocable does.
Irrevocable Beneficiary
A life insurance beneficiary designation that cannot be changed by the policyowner without the written consent of the named beneficiary.
- Requires beneficiary's consent for any policy changes affecting their interest.
- Offers the least flexibility to the policyowner.
- Often used in divorce settlements or estate planning for certainty.
Memory trick: An 'Irrevocable Beneficiary' is like a 'Locked Door' – you can't change it without their 'Key' (consent).