Which of the following statements concerning beneficiary designations in a life insurance policy is correct?

• A. I. If the policyowner does not have the unilateral right to change the beneficiary, the designation is irrevocable.
• B. II. A revocable beneficiary has no enforceable rights in the policy prior to maturity and cannot interfere in any way with the exercise by the policyowner of their rights in the policy.
• C. Both I and II
• D. Neither I nor II

Answer: (C)

Understanding how beneficiary designations work in a life insurance policy helps explain why both statements are correct. The key idea is the difference between irrevocable and revocable designations and how that affects the policyowner’s control.

If the policyowner does not have the unilateral right to change the beneficiary, the designation is irrevocable. An irrevocable beneficiary has a secured interest in the policy proceeds, and the owner cannot change or remove that beneficiary without the beneficiary’s consent. That’s why the lack of a unilateral right to change implies the designation is irrevocable.

A revocable beneficiary, on the other hand, has no enforceable rights to the policy before death. The policyowner retains full control and can change or remove the revocable beneficiary at any time without the beneficiary’s consent. Because the beneficiary’s rights are not vested, the revocable designation cannot interfere with the policyowner exercising those rights.

So, both statements describe true aspects of beneficiary designations: the first ties lack of unilateral change ability to an irrevocable designation, and the second describes how revocable designation gives the owner ongoing control with no enforceable beneficiary rights before death.