Rhode Island Life Insurance Practice Exam

Who has the authority to change the beneficiary designation on a life insurance policy?

1. Beneficiary

2. Producer

3. Policyowner

4. Insurer

The correct answer is: Policyowner

The policyowner holds the authority to change the beneficiary designation on a life insurance policy. This is because the policyowner is the individual who has the rights to control the policy, including making decisions about its provisions and terms. While beneficiaries receive the benefits upon the policyholder's death, they do not have any say in modifying the policy itself. The producer, or agent, may assist the policyowner with the process, but they do not have the authority to make changes on behalf of the policyowner. The insurer is responsible for administering the policy and might process the change once it is formally requested by the policyowner, but they cannot initiate a change without the policyowner's direction. Thus, only the policyowner can exercise the right to change the beneficiary designation, reflecting the ownership and control they have over the policy.