Life License Qualification Program (LLQP) Practice Exam

If a policyowner has named a beneficiary that can be changed anytime, what type of beneficiary is it?

1. Tertiary

2. Irrevocable

3. Revocable

4. Contingent

The correct answer is: Revocable

A beneficiary that can be changed at any time by the policyowner is classified as a revocable beneficiary. This designation allows the policyowner the flexibility to alter the beneficiary's status or replace them entirely without needing consent from the current beneficiary. In this context, the other types of beneficiaries serve different purposes. An irrevocable beneficiary cannot be changed without their consent, meaning the policyowner would lose the ability to make unilateral changes, which is opposite to the characteristic of a revocable beneficiary. A tertiary beneficiary is usually the third in line to receive benefits after the primary and contingent beneficiaries, but this term does not address the policyowner's ability to change them. A contingent beneficiary comes into play only if the primary beneficiary is unable to receive the benefits, but again, this does not reference the ability to change the beneficiary designation at will. Therefore, the most suitable term for a beneficiary that the policyowner can change anytime is indeed revocable.