27. Which of the following statements is true about an irrevocable beneficiary designation in a life insurance policy?
Answer: A
The policy owner can change the designation only with the consent of the beneficiary.
An irrevocable beneficiary designation in a life insurance policy means that the policy owner cannot change the chosen beneficiary without the beneficiary's consent. This provides the beneficiary with guaranteed rights to the policy proceeds.
A) The policy owner can change the designation only with the consent of the beneficiary
This statement is true. An irrevocable beneficiary designation restricts the policy owner's ability to change the beneficiary without obtaining permission from the beneficiary. This ensures that the beneficiary's rights are protected.
B) The designation can be changed only in the policy owner's will
This statement is incorrect. While a will can dictate the distribution of a policy's benefits in certain circumstances, it does not determine how irrevocable beneficiary designations can be changed. The policy owner must obtain consent from the irrevocable beneficiary to make any changes to the designation.
C) The policy owner cannot change the designation at any time
This statement is misleading as it lacks context. While it is true that the policy owner cannot unilaterally change an irrevocable beneficiary designation, they can change it if they obtain consent from the beneficiary. Therefore, the statement does not accurately reflect the nuances of an irrevocable designation.
D) The policy owner can change the designation only with the consent of the insurance company
This statement is incorrect. The need for the insurance company's consent is not a requirement for changing an irrevocable beneficiary designation. Instead, the policy owner must secure consent from the irrevocable beneficiary to make any changes.
Conclusion
The correct answer is A, as it accurately reflects the nature of an irrevocable beneficiary designation in life insurance policies, where changes require the beneficiary's consent. All other options either misinterpret the guidelines surrounding beneficiary changes or present inaccurate requirements, thereby failing to capture the essence of irrevocable designations.