Irrevocable Beneficiary

A revocable beneficiary designation:

1. A.Can be changed by the owner at any timeCorrect - revocable means changeable.
2. B.Receives nothingRevocable describes how readily the designation can be changed, not whether the person collects. If the designation still stands at death, that beneficiary is paid.
3. C.Is always the estateThe estate receives proceeds when no living beneficiary is named, an outcome generally worth avoiding. A revocable designation names a specific person and simply leaves the owner free to substitute another.
4. D.Cannot be changed without consentThis describes an irrevocable designation, the opposite arrangement. The defining feature of a revocable designation is that the owner needs nobody's permission to change it.

Why: A revocable beneficiary can be changed by the policyowner at any time.

An irrevocable beneficiary:

1. A.Is always the insured's estateConfuses two unrelated designations. Naming the estate is a decision about who receives the proceeds; irrevocability is a decision about whether the owner may later change whoever is named.
2. B.Cannot be changed without the beneficiary's consentCorrect - irrevocable designations are locked without consent.
3. C.Can be changed by the owner at any timeDescribes a revocable beneficiary, which is the default designation. Making a beneficiary irrevocable is precisely the act of surrendering that unilateral power to change it.
4. D.Receives no benefitInverts the effect of the provision. Irrevocability strengthens the beneficiary's position by giving her a vested interest that the owner cannot strip away without her consent.

Why: An irrevocable beneficiary cannot be changed without that beneficiary's consent.

An irrevocable beneficiary designation means the policyowner...

1. A.Must name the insured as beneficiaryAn irrevocable designation has nothing to do with naming the insured.
2. B.Cannot change the beneficiary without that beneficiary's consentCorrect — an irrevocable designation locks in the beneficiary's rights.
3. C.Loses all ownership rights in the policyThe owner keeps ownership; only actions harming the beneficiary need consent.
4. D.May change the beneficiary at any time at willThat describes a revocable beneficiary, not an irrevocable one.

Why: With an irrevocable beneficiary, the owner cannot change the beneficiary, take a policy loan, or otherwise diminish the beneficiary's interest without that beneficiary's written consent.

The difference between a revocable and an irrevocable beneficiary is that an irrevocable beneficiary:

1. A.Must consent to a change of beneficiaryCorrect - irrevocable designations need consent.
2. B.Has no interest in the policyDescribes the revocable beneficiary, whose expectancy the owner can erase at any time. An irrevocable designation creates a vested interest the owner cannot strip away alone.
3. C.Owns the policy automaticallyConfuses a vested beneficiary interest with ownership rights. The owner still holds the contract and pays the premiums; the beneficiary gains a veto, not the policy itself.
4. D.Can be changed freely anytimeStates the rule for the revocable designation, which is the default. Irrevocable means exactly the opposite: the change needs that beneficiary's written consent.

Why: An irrevocable beneficiary must consent to a change of beneficiary or major policy changes; a revocable one has no such right.