Pennsylvania Life and Health Insurance Exam Practice Question
A policyowner’s right to change beneficiaries is limited when the beneficiary is designated as:
Correct Answer: A
Rationale: When a beneficiary is designated as irrevocable, the policyowner cannot change this designation without the consent of the beneficiary. This ensures that the beneficiary's rights are protected, making it a binding choice.
In contrast, a contingent beneficiary can be changed by the policyowner at any time, as they only receive benefits if the primary beneficiary is unavailable. A primary beneficiary is the first in line to receive benefits, but this designation is revocable, allowing the policyowner to make changes freely. Revocable beneficiaries can be altered or replaced at the policyowner's discretion, providing them full control over the policy.
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