Which statement about an irrevocable beneficiary is accurate?

Which statement about an irrevocable beneficiary is accurate?

• A. The policy owner can freely change the beneficiary at any time.
• B. The policy owner can surrender the policy without the beneficiary's consent.
• C. The policy owner cannot borrow against the policy.
• D. The policy owner must obtain the irrevocable beneficiary's consent to changes that affect the beneficiary's rights, such as surrender or borrower rights.

Answer: (D)

An irrevocable beneficiary designation gives the named beneficiary a vested interest in the policy that the owner cannot alter without the beneficiary’s consent. Because of this protection, the owner cannot make changes that would affect the beneficiary’s rights—such as surrendering the policy or taking out a loan that would reduce the death benefit—without the irrevocable beneficiary agreeing. This is how the designation safeguards the beneficiary’s financial interest. The idea that the owner can freely change the beneficiary is not true with an irrevocable designation, and surrender or borrowing actions can’t proceed if they would impact the beneficiary’s rights without consent.

An irrevocable beneficiary designation gives the named beneficiary a vested interest in the policy that the owner cannot alter without the beneficiary’s consent. Because of this protection, the owner cannot make changes that would affect the beneficiary’s rights—such as surrendering the policy or taking out a loan that would reduce the death benefit—without the irrevocable beneficiary agreeing. This is how the designation safeguards the beneficiary’s financial interest. The idea that the owner can freely change the beneficiary is not true with an irrevocable designation, and surrender or borrowing actions can’t proceed if they would impact the beneficiary’s rights without consent.