Life License Qualification Program (LLQP) Practice Exam

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How does the choice of a revocable beneficiary affect the policyowner's rights?

  1. The policyowner cannot change the beneficiary

  2. The policyowner may change the beneficiary without consent

  3. The policyowner needs to notify the current beneficiary

  4. The policyowner must wait for a specified time to make the change

The correct answer is: The policyowner may change the beneficiary without consent

Choosing a revocable beneficiary allows the policyowner to maintain control over the beneficiary designation. With a revocable designation, the policyowner has the right to change the beneficiary at any time without needing to obtain consent from the current beneficiary. This flexibility is a significant aspect of a revocable beneficiary designation, as it empowers the policyowner to adjust their policy in response to changing personal circumstances such as relationships, family needs, or financial situations. Other responses to the question reflect limitations or conditions that are not applicable to a revocable beneficiary. For instance, the inability to change the beneficiary, requiring notification to the current beneficiary, or waiting a specified time are characteristics associated with an irrevocable beneficiary designation, where the policyowner loses some control over the beneficiary choice. Understanding these distinctions is essential for comprehending the implications of beneficiary designations in life insurance policies.

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