Revocable beneficiary

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(Redirected from Irrevocable beneficiary)

Revocable beneficiary is the economy-related term, which explains the rules of guaranteed rights for compensations from the official financial entities. According to Jill Booker and his Comprehensive Practices in Risk and Retirement Planning states, that "a revocable beneficiary designation is one whereby the policy owner retains the rights to alter the beneficiary designation without obtaining the prior consent of the beneficiary. It also has no legal right to any proceeds or decisions regarding the policy until after the death of the life insured" [1].

Also the Concise Encyclopedia of Insurance describes that "a revocable beneficiary is one the owner of a life insurance policy or annuity has the right to change" [2].

The beneficiary is to be named as revocable, when the owner of the life insurance is authorized to modify the beneficiaries. In Life and Health Insurance License Publication, the concept of revocable beneficiary is "the beneficiary in a life insurance policy in which the owner reserves the right to revoke or change the beneficiary" [3].

The revocable beneficiary would not have rights to the policy until the death of the insured. That means there would be no possibility to withdraw the beneficiary sooner.


There are many limitation applied to the owner of policy, however Mark S. Dorfman in his sixth edition of Introduction to Risk Management and Insurance indicates also one's rights [4]:

  • the right to assign the policy as security for a loan,
  • the right to name a beneficiary,
  • the right to take any cash value.

The policy holder is allowed to modify the rules in regards to addressing a recipient of payment, the policy assumptions and to conclude the policy totally with no necessity for arranging the agreement on revocable beneficiary. Actually this aspect is being included in most of the offered insurance policies.

Revocable beneficiaries can be divided into primary and secondary. The former have first right to payouts, and the latter have to wait. However, if the primary beneficiary dies, the secondary will receive payout. Irrevocable beneficiary keeps rights until the policy is active. It means that for example wife after divorce will remain irrevocable beneficiary.


  1. J. Booker (2007) "Comprehensive Practices in Risk and Retirement Planning"
  2. L. Silver, R.E. Stevens, K.E. Clow (2010) "Concise Encyclopedia of Insurance"
  3. P. Boger (2005) "Life and Health Insurance License"
  4. M.S.Dorfman (1998) "Introduction to Risk Management and Insurance"

Revocable beneficiaryrecommended articles
Absolute assignmentSubrogation clauseMortgage deedStatute barred debtLien theory stateConsent orderSpendthrift clauseIndemnity principleBankers lien


Author: Anna Droczak