With an irrevocable beneficiary designation, a policyowner who wants to change the beneficiary must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
An irrevocable beneficiary has a vested interest in the policy that cannot be defeated unilaterally. To change an irrevocable beneficiary, the policyowner must obtain that beneficiary's written consent, because the beneficiary's rights are protected by the designation. The requirement prevents the owner from stripping the beneficiary of expected proceeds without agreement. Consent is also generally needed for actions that would diminish the beneficiary's interest, such as taking loans against or surrendering the cash value, because those actions reduce what the beneficiary stands to receive.
Why the other options are wrong
- B) Filing a change-of-beneficiary form without the current beneficiary's signature is sufficient only under a revocable designation. With an irrevocable beneficiary, the form must be accompanied by the beneficiary's written consent to be effective.
- C) The insured's death does not unlock the designation; the proceeds simply become payable as written. If the owner wanted a different recipient, the consent of the irrevocable beneficiary was required before death.
- D) There is no surrender fee paid to a beneficiary to obtain a change. The legal obstacle is consent, not money, and paying a fee would not overcome the beneficiary's vested interest.
Memory hook
Irrevocable = the beneficiary owns a veto. No signature, no change, no loan, no surrender.