Question

T is the policy owner for a Life Insurance policy with an Irrevocable beneficiary designation. If T wishes to change the beneficiary, what options does T have?

1) T can change the beneficiary at any time without any restrictions
2) T can change the beneficiary only with the consent of the current beneficiary
3) T cannot change the beneficiary once the designation is irrevocable
4) T can change the beneficiary by paying a fee

Answer 1

If a policy owner wants to change an irrevocable beneficiary on a Life Insurance policy, they can only do so with the consent of the current beneficiary, as the irrevocable designation grants the beneficiary a vested interest in the policy.

Step-by-step explanation:

If T is the policy owner for a Life Insurance policy with an Irrevocable beneficiary designation and wishes to change the beneficiary, T has limited options. The correct option is that T can change the beneficiary only with the consent of the current beneficiary. This is because an irrevocable beneficiary designation means that the beneficiary has a vested interest in the policy and T cannot unilaterally change this designation. If the current irrevocable beneficiary agrees to relinquish their rights or consents to the change, then T may proceed to change the beneficiary. Without such consent, T's hands are tied.