In an insurance policy, the policyholder may designate an irrevocable or revocable beneficiary to receive a pay-out in the event of his or her death. Denial of income from the policy after the death of the insured is not possible if the policy lists them as an irrevocable beneficiary.
What is a Revocable Beneficiary? A revocable beneficiary is someone who the policy owner names to receive the benefit of a life insurance policy when the insured passes away. Moving forward, the policy owner can change both the policy and any beneficiaries without the revocable beneficiary’s consent.
Children are often named irrevocable beneficiaries. If a parent wanted to guarantee money to a child, then the parent could designate that child as an irrevocable beneficiary, thus ensuring the child will receive death benefits from the life insurance policy or segregated fund contract.
For example, a spouse who is an irrevocable beneficiary has the right to a policy payout even after a divorce. The ex-spouse must agree to changes in the policy before or after the death of the insured.