Final answer:
A policy owner's rights are limited under the irrevocable beneficiary designation, which restricts changes to the beneficiary without their consent. Insurance policies payout upon specific events such as medical expenses, death of the policyholder, or damage to property.
Step-by-step explanation:
A policy owner’s rights are limited under the irrevocable beneficiary designation. When a policy owner names an irrevocable beneficiary, they are giving up the right to make any changes to that beneficiary without the consent of the beneficiary themselves. This contrasts with a revocable beneficiary, where the policy owner can change the beneficiary at any time. In terms of payouts, insurance policies are designed to pay out when specific events occur, such as when medical expenses are incurred, the policyholder dies, a car is damaged, stolen, or causes damage to others, or when a dwelling is damaged or burglarized. Understanding beneficiary designations is crucial for policy owners to ensure their insurance benefits are distributed according to their wishes upon triggering events.