Rhode Island Life Insurance Practice Exam

Which statement is true regarding the Change of Beneficiary provision?

1. The beneficiary must be notified of the change

2. The policyowner can change the beneficiary

3. The beneficiary designation is irrevocable

4. The policyowner needs approval from the insurer to change

The correct answer is: The policyowner can change the beneficiary

The statement that the policyowner can change the beneficiary is correct because, in most life insurance policies, the policyowner retains the right to modify the beneficiary designation at any time unless the beneficiary designation is specified as irrevocable. This means that the policyowner has the authority to decide to whom the policy's death benefit will be paid, which is a fundamental right associated with policy ownership. In contrast, notifying the beneficiary of the change, requiring their approval, or having an irrevocable designation are all elements that can vary based on the specifics of a policy or beneficiary designation type. However, the general principle remains that the policyowner holds the power to change the beneficiary whenever they choose, provided there are no restrictions in the policy. This flexibility allows policyowners to ensure their life insurance benefits are directed to their preferred individuals or entities as personal circumstances change over time.