Life License Qualification Program (LLQP) Practice Exam

Which statement is true regarding the Change of Beneficiary provision?

1. The beneficiary can only be changed with the consent of the insurer

2. The policyowner can change the beneficiary

3. The insured can change the beneficiary

4. A beneficiary change is subject to underwriting procedures

The correct answer is: The policyowner can change the beneficiary

The chosen statement is accurate because the policyowner possesses the authority to change the beneficiary on a life insurance policy. This privilege is typically granted within the policy contract itself, empowering the policyowner to make adjustments as their circumstances evolve, such as marriage, divorce, or the birth of new children. By allowing the policyowner this control, insurance products are designed to be flexible and reflective of the policyowner's personal life changes and needs. Other statements do not align with the standard practices of life insurance policies. For example, requiring the insurer's consent for a beneficiary change would limit the policyowner's rights and contradict the fundamental purpose of the ownership. The notion that only the insured could change the beneficiary also misunderstands the distinctions between policy ownership and coverage, as it is primarily the policyowner who holds that right. Lastly, making a beneficiary change subject to underwriting procedures is unnecessary since such changes are generally administrative, not dependent on the insured's health status or risk evaluation.