Maryland Life and Health Insurance License Practice Exam

Which beneficiary designation prohibits the policyowner from making changes without written consent?

1. Revocable beneficiary

2. Contingent beneficiary

3. Irrevocable beneficiary

4. Testamentary beneficiary

The correct answer is: Irrevocable beneficiary

An irrevocable beneficiary designation is one where the policyowner cannot alter or change the beneficiary without obtaining written consent from that beneficiary. This means that once the designation is made, the policyowner is bound by it and cannot make any adjustments, such as removing the irrevocable beneficiary or naming a new one, without permission. This designation provides a level of security to the beneficiary, ensuring that they have a permanent right to the proceeds of the policy, regardless of any subsequent decisions or changes made by the policyowner. This contrasts with other types of designations, such as revocable beneficiaries, where the policyowner maintains full control to change beneficiaries at any time without needing consent from the parties involved.