3. A beneficiary who must consent to a change in the beneficiary designation in a life insurance policy is referred to as:
Answer: A
An irrevocable beneficiary
A beneficiary who must consent to a change in the beneficiary designation in a life insurance policy is known as an irrevocable beneficiary. This designation means that the policyholder cannot change the beneficiary without obtaining permission from the irrevocable beneficiary.
A) an irrevocable beneficiary
This option is correct because an irrevocable beneficiary has rights that prevent the policyholder from altering the beneficiary designation without their consent. This ensures that the beneficiary's entitlement to the policy proceeds is protected.
B) a contingent beneficiary
A contingent beneficiary is not the correct answer as this type of beneficiary only receives the policy benefits if the primary beneficiary is unable to do so. They do not have rights that require their consent for changes to the beneficiary designation.
C) a secondary beneficiary
This option is incorrect because a secondary beneficiary is essentially another term for a contingent beneficiary. Like contingent beneficiaries, they do not have the power to require consent for changes to the beneficiary designation.
D) a primary beneficiary
A primary beneficiary is the first in line to receive the benefits from the life insurance policy. However, this designation does not require the consent of the primary beneficiary for changes to be made, which makes this option incorrect.
Conclusion
The designation of an irrevocable beneficiary is crucial in life insurance policies as it provides the beneficiary with rights that protect their interest in the policy. In contrast, the other options—contingent, secondary, and primary beneficiaries—do not possess the same level of protection or requirement for consent, making them incorrect in this context.