Question 60

A life insurance policy owner MUST obtain the agreement of the beneficiary or other parties before changing beneficiaries when the current beneficiary designation is irrevocable.

An irrevocable beneficiary designation requires the policy owner to obtain consent from the beneficiary before making any changes. This is because the irrevocable status grants the beneficiary certain rights that cannot be altered without their agreement.

A) primary

A primary beneficiary designation allows the policy owner to change the beneficiary without needing consent from the primary beneficiary. This flexibility means that the policy owner can make changes at any time, making this option incorrect in the context of the question.

B) irrevocable

An irrevocable beneficiary designation means that the beneficiary has a vested interest in the policy and cannot be changed without their consent. This is the correct answer as it aligns with the requirement for the policy owner to obtain agreement before making changes.

C) per capita

A per capita designation refers to how benefits are distributed among beneficiaries but does not impact the ability to change beneficiaries. The policy owner can still change beneficiaries without needing consent if the designation is not irrevocable, making this option incorrect.

D) per stripes

Similar to per capita, a per stripes designation outlines the distribution of benefits among descendants of a deceased beneficiary. However, this designation does not impose any restrictions on changing beneficiaries without consent, rendering this option incorrect.

Conclusion

The irrevocable designation is the only option that legally requires the policy owner to obtain consent from the beneficiary before making changes. In contrast, the other options (primary, per capita, and per stripes) do not impose such a requirement, affirming that option B is the definitive correct answer in this scenario.