Question 64

The beneficiary provision where the beneficiary does NOT have a vested interest in the policy is considered revocable.

A revocable beneficiary provision allows the policy owner to change the beneficiary at any time without the beneficiary's consent, meaning the beneficiary does not have a vested interest in the policy.

A) primary.

The primary beneficiary is the first individual designated to receive benefits from a policy upon the insured's death. This designation does not imply that the beneficiary lacks a vested interest; in fact, a primary beneficiary typically has a vested interest in the policy's benefits.

B) revocable.

This option is correct because a revocable beneficiary does not have a vested interest in the policy. The policyholder retains the right to change the beneficiary designation, which means the beneficiary's claim to the policy benefits is contingent upon the policyholder's decision.

C) irrevocable.

An irrevocable beneficiary has a vested interest in the policy, as the policyholder cannot change the beneficiary without their consent. This contradicts the premise of the question, which specifies a lack of vested interest.

D) contingent.

A contingent beneficiary is one who will receive benefits only if the primary beneficiary cannot do so. While contingent beneficiaries have a claim to benefits, they typically do not have a vested interest until the conditions for their claim arise, but they are not the best answer in this context.

Conclusion

The choice of "revocable" accurately reflects a beneficiary provision where the beneficiary does not have a vested interest in the policy. In contrast, options like primary and irrevocable indicate a vested interest, while contingent beneficiaries are conditional, making them less relevant to the question. Thus, revocable is the definitive correct answer.