Kentucky Health Insurance Practice Exam

If an insured wants to retain all rights of ownership while naming her husband as the beneficiary, what type of beneficiary should she choose?

1. Contingent

2. Irrevocable

3. Revocable

4. Primary

The correct answer is: Revocable

Choosing a revocable beneficiary allows the insured to maintain full control over the policy, including the right to change the beneficiary designation or cancel the policy altogether. This means that while her husband is named as the beneficiary and would receive the benefits upon the insured's death, the insured can still alter this designation or reclaim rights to the benefits if necessary. In contrast, an irrevocable beneficiary designation would prevent the policyholder from changing the beneficiary without the irrevocable beneficiary's consent, which could limit her control over the policy. Primary and contingent beneficiaries describe the order in which benefits are paid but do not refer to the ownership rights of the policyholder. Therefore, selecting a revocable beneficiary is the best choice for the insured who wants to retain all rights while designating her husband to receive the policy benefits.