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What is an irrevocable beneficiary?

In the life insurance application process, you will be asked if you want to designate an irrevocable beneficiary. Here are a few things to consider before you make a decision.

Once you start a family, there’s an extent to which your life is no longer your own. You have obligations ranging from the banal (soccer practice) to the fundamental (earning enough money to support another human being; trying really hard not to die).

But your life insurance policy is your own. Although its purpose is to protect your family, and you won’t financially benefit from it yourself if the worst should happen, you get to choose how much coverage to apply for and for how long, and who should benefit from it. But you can’t change an irrevocable beneficiary.

What is a beneficiary?

A life insurance beneficiary is a person who will receive the payout from a policy if you were to die. The proceeds from the payout can be used to help pay for financial needs – those that come with death, such as funeral arrangements and other end-of-life expenses, or day-to-day bills like the mortgage and child care.

You can name two (or more) people as primary beneficiaries, outlining the percentage of the policy payout each would be given. You can also name a contingent beneficiary, who could receive the death benefit if something happened to the primary beneficiary. Think of a contingent beneficiary as your “alternate.” With most life insurance policies, you can change your beneficiary designation at any time.

For some, designating two primary beneficiaries — say, a spouse or partner and a parent — may make sense, especially if both could face financial hardship. For others, one primary life insurance beneficiary, with a contingent beneficiary named, makes the most sense. The latter is what we commonly see at Haven Life.

You can have more than one primary beneficiary and more than one contingent beneficiary; you simply need to designate what percentage of your life insurance proceeds you want to allocate to each of your primary beneficiaries. Haven Life, for example, permits up to 10 primary beneficiaries and 10 contingent beneficiaries. No matter how many primary beneficiaries you have, the total percentage allocated must equal 100%. How you divide that 100% is up to you, the policyholder.

What are irrevocable beneficiaries versus revocable beneficiaries?

An irrevocable beneficiary is someone named as a beneficiary of your life insurance policy who cannot be removed from it unless they agree. Ever. If, for example, your spouse is an irrevocable beneficiary and you divorce, your spouse is still entitled to remain on the policy, regardless of whether you want that. Furthermore, you are not permitted to cancel the policy unless they agree.

Put another way, if you and your spouse don’t stay married “’til death us do part,” you’ll still be joined in life insurance until after your death if they are an irrevocable beneficiary. In some states, irrevocable beneficiaries have the right to approve or deny changes to a policy (such as the amount of coverage), and in others, they only have power over their own stake in the policy. But wherever you live, irrevocable really does mean forever.

You can designate revocable beneficiaries, who you can remove when you want (when a child has grown up and no longer needs the safety net your policy provides, for example), so why would you give up that option? As is often the case with life insurance, one reason is peace of mind. If you have kids and your spouse is the primary caregiver, perhaps they want the security of knowing that even if you divorce, they’ll still be protected financially if you pass away. Life insurance policies are often part of pre-nuptial agreements, including the discussion of irrevocable beneficiaries.

It’s more common to name revocable beneficiaries, and those are either primary beneficiaries or contingent beneficiaries.

How often should I review my beneficiaries?

People move. Relationships change. Life … happens. It’s a good idea to review your beneficiaries at least once a year to make sure your beneficiary designation is up to date. Remember, you can always change, add or remove revocable beneficiaries, but not irrevocable ones.

Whether your beneficiaries are revocable, irrevocable, or a mix of the two, it’s important to choose carefully, and (assuming you have at least some revocable beneficiaries) to review your beneficiaries from time to time to make sure your policy is doing what you need. A life insurance policy allows you to financially protect the people you love. Choosing who your beneficiaries are and how they’re designated is an important part of that process.

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Michael Davis is a freelance writer and editor who has covered everything from fashion and music to parenting, work, and finance. He has been a chef, restaurateur and record label owner.  Opinions are his own.

Haven Life Insurance Agency offers this as educational information only. The information provided is not written or intended as specific legal advice, which Haven Life does not provide. Individuals are encouraged to seek advice from their own legal counsel.

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Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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