In terms of beneficiary designations, what is an irrevocable designation?

An irrevocable beneficiary designation is one that cannot be altered or revoked without the explicit written consent of the designated beneficiary. This means that once the policyholder establishes an irrevocable beneficiary, they are legally bound to the decision, and any changes to the beneficiary must have the beneficiary's approval.

This type of designation is often used for protecting the interests of the beneficiary, ensuring that they will receive the death benefit regardless of any subsequent actions taken by the policyholder. It provides security for the beneficiary, often making it a favored option in divorce settlements or in situations where a policyholder wants to guarantee a benefit to a specific individual.

In contrast, a revocable designation allows the policyholder to change the beneficiary at any time without the need for consent, a designation requiring court approval introduces a legal complication that is not standard for most beneficiary changes, and a designation that expires after a specified time does not accurately reflect any established practice within life insurance policies. Thus, the correct understanding of an irrevocable designation highlights its nature of requiring the beneficiary's consent for any modifications.