What happens if a life insurance policy has an irrevocable beneficiary?

When a life insurance policy has an irrevocable beneficiary, it means that the beneficiary designation cannot be changed without the consent of the irrevocable beneficiary. This provision protects the rights of the beneficiary, ensuring that they maintain their entitlement to the policy benefits as specified.

The existence of an irrevocable beneficiary creates a binding agreement that the policy owner cannot alter unilaterally, which means that if the policy owner wishes to change the beneficiary for any reason, they must obtain permission from the current irrevocable beneficiary. This setup provides security for the beneficiary but limits the policy owner's flexibility in managing their policy.

In contrast to other options, the beneficiary does not possess the ability to alter their designation at will, nor can the insurer make changes to the beneficiary designation without consent. Additionally, the policy remains valid even if the irrevocable beneficiary dies; in that case, the benefits typically would either be paid to the contingent beneficiary or revert to the insured's estate, assuming there is an arrangement in place to address such scenarios.