Life License Qualification Program (LLQP) Practice Exam

Which type of designation would make a change of beneficiary permanent?

1. Revocable

2. Contingent

3. Irrevocable

4. Primary

The correct answer is: Irrevocable

The designation that would make a change of beneficiary permanent is the irrevocable beneficiary designation. When a beneficiary is designated as irrevocable, the policyholder cannot change the beneficiary without that person’s consent. This means that the rights of the irrevocable beneficiary are protected, and thus, any alteration or removal of the beneficiary would require their agreement. This designation provides financial security to the beneficiary, ensuring they will receive the benefits as intended, unless they agree to any changes. In contrast, a revocable designation allows the policyholder to change the beneficiary at any time without consent, making it more flexible but less secure for the beneficiary. The contingent designation refers to a secondary beneficiary who receives the benefits only if the primary beneficiary is deceased, and does not by itself offer permanence like the irrevocable option. The primary designation is simply used to identify the main beneficiary who will receive the benefits, but it can also be revoked or changed by the policyholder. Therefore, the irrevocable designation distinctly ensures permanence in the selection of beneficiaries.