An irrevocable beneficiary designation has which consequence?

• A. Loses all rights in a life insurance policy if they die before the insured.
• B. Has no ability to prevent collateral assignment of the policy.
• C. Cannot object to the policyowner taking policy loans.
• D. Cannot grant permission to make the beneficiary designation revocable.

Answer: (A)

An irrevocable beneficiary designation creates a vested, non-revocable interest for the named beneficiary in the policy’s proceeds. This means the policyowner cannot change or cancel that beneficiary or their rights without the beneficiary’s consent. If the irrevocable beneficiary dies before the insured, the beneficiary’s interest ends because they are no longer alive to receive the proceeds, so they lose all rights to the policy. The death benefit would then go to a contingent beneficiary or the insured’s estate, depending on the policy’s design. This outcome—the beneficiary’s rights ending upon their death before the insured—is the consequence described by the choice.