Life License Qualification Program (LLQP) Practice Exam

What type of life insurance beneficiary requires written consent when a change of beneficiary is made?

1. Irrevocable beneficiary

2. Tertiary beneficiary

3. Primary beneficiary

4. Revocable beneficiary

The correct answer is: Irrevocable beneficiary

An irrevocable beneficiary is a designation that requires written consent from the beneficiary for any changes to be made, including the cancellation or modification of the death benefit entitlements. This type of designation provides a level of security for the beneficiary, as it ensures that the policy owner cannot simply change the beneficiary without their agreement. In contrast, the other types of beneficiaries, such as revocable beneficiaries, can be changed by the policyholder at any time without needing to obtain consent from the beneficiary. Primary beneficiaries are the first in line to receive benefits and can be either irrevocable or revocable, but their designation does not necessitate consent for changes if they are revocable. Tertiary beneficiaries come into play only if the primary and secondary beneficiaries cannot be located or have predeceased the policyholder, and thus they do not have any claim to written consent either. This structure of irrevocable beneficiaries protects their rights and interests, ensuring that they are aware of and agree to any changes that could affect their potential benefits under the life insurance policy.