Minnesota Life Insurance License Practice Exam

Which of the following beneficiary designations prohibits the policy owner from making any changes to the policy without the beneficiary's written consent?

1. Revocable beneficiary

2. Irrevocable beneficiary

3. Contingent beneficiary

4. Primary beneficiary

The correct answer is: Irrevocable beneficiary

An irrevocable beneficiary designation locks in the beneficiary’s rights to the policy benefits and prohibits the policy owner from making changes to the policy without obtaining written consent from the irrevocable beneficiary. This means that once a beneficiary is designated as irrevocable, the policyholder can no longer alter the beneficiary designation, cancel the policy, or take out loans against the policy without the beneficiary agreeing to those changes. This provides a level of security and assurance to the beneficiary that they will receive the benefits as stipulated. In contrast, a revocable beneficiary allows the policy owner the flexibility to change the beneficiary designation at any time without needing consent. A contingent beneficiary is one who receives the death benefit only if the primary beneficiary is unable to do so, and this designation does not entail the same restrictions on policy changes. The primary beneficiary designation simply indicates the first individual or entity entitled to claim the benefits, which again does not restrict the policy owner's ability to modify the policy. Thus, the correct designation associated with the restriction on policy changes is indeed the irrevocable beneficiary.