In what way is an irrevocable beneficiary different from a revocable one?

An irrevocable beneficiary is distinct from a revocable beneficiary primarily because a policy owner cannot alter or remove an irrevocable beneficiary without the explicit permission of that beneficiary. This creates a level of security for the beneficiary, as it guarantees that they will receive the policy proceeds and cannot be replaced or removed at the whim of the policy owner.

In contrast, a revocable beneficiary can be changed at any time and for any reason by the policy owner without needing to inform or obtain consent from the beneficiary. This inherent nature of irrevocable beneficiaries establishes their role in providing assured benefits to the individual designated in the insurance policy, which is essential in estate planning and ensuring financial security for dependents or other chosen individuals.

The other options suggest characteristics that do not accurately represent how irrevocable and revocable beneficiaries function. For instance, both types of beneficiaries can receive benefits as outlined in the policy, and insurers recognize both categories.