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. The client wants to ensure that their chosen beneficiary cannot be changed by anyone, including the policyowner, without the beneficiary's written consent. Which type of beneficiary designation should the agent recommend?
- ARevocable Beneficiary
- BIrrevocable Beneficiary
- CPrimary Beneficiary
- DContingent Beneficiary
Show answer & explanationAnswer & explanation
Correct answer: B. Irrevocable Beneficiary
An irrevocable beneficiary designation means that the policyowner cannot change the beneficiary, surrender the policy, or borrow against its cash value without the written consent of the named irrevocable beneficiary. This provides the highest level of security for the beneficiary.
Why the other options are wrong
- A. A revocable beneficiary can be changed by the policyowner at any time without their consent.
- C. A primary beneficiary is the first person or entity designated to receive the policy proceeds upon the insured's death.
- D. A contingent beneficiary receives proceeds only if the primary beneficiary dies before the insured.
Irrevocable Beneficiary
A beneficiary designation that cannot be changed by the policyowner without the written consent of the named beneficiary, granting the beneficiary vested rights in the policy.
- Requires beneficiary's consent for changes
- Gives beneficiary vested rights
- Limits policyowner's control over policy
Memory trick: For 'Ironclad' beneficiary protection, choose 'Irrevocable' – no turning back!