Tennessee Insurance Practice Exam

Which type of life insurance beneficiary requires consent from the beneficiary to make any changes?

1. Contingent beneficiary

2. Revocable beneficiary

3. Irrevocable beneficiary

4. Conditional beneficiary

The correct answer is: Irrevocable beneficiary

The type of life insurance beneficiary that requires the insured's consent for any changes is the irrevocable beneficiary. When a beneficiary is designated as irrevocable, it means that the policy owner cannot change the beneficiary designation or make any alterations to the policy that would affect the irrevocable beneficiary's rights without obtaining their consent. This status is often used to protect the interests of a beneficiary, making it essential for the policyholder to communicate and get agreement from that beneficiary before any changes can be enacted. In contrast, a contingent beneficiary does not require consent for changes because they only receive benefits if the primary beneficiary is unable to do so; similarly, a revocable beneficiary allows the policyholder to change the designation at any time without needing to consult the beneficiary. The concept of a conditional beneficiary is not a widely recognized term in life insurance, which could lead to confusion, but it implies some conditions that must be met which do not typically involve beneficiary rights as irrevocable beneficiaries do. Therefore, the characteristic of requiring consent is uniquely tied to the irrevocable beneficiary status.