A beneficiary change can occur
Options:
a) only upon the request of the revocable beneficiary
b) only on specified dates within the policy
c) normally at any time during the policy term
d) at no time
The Correct Answer Is:
c) normally at any time during the policy term
Correct Answer Explanation
A beneficiary change can occur normally at any time during the policy term.
➦ Regardless of whether the beneficiary is still alive or not, a beneficiary change can happen at any time during a policy term.
➦ Insurance companies must notify all beneficiaries when a beneficiary passes away so that they can receive benefits.
➦ It is possible to request removal of a beneficiary’s name from the list of beneficiaries if there are multiple beneficiaries and one does not want to continue receiving benefits from the policy.
➦ As long as all other statutory requirements are met, a beneficiary change can be made without the revocable beneficiary’s request.
➦ Beneficiaries can be changed by executors or those authorized to make health care decisions for the deceased if no will exists or if there is no primary beneficiary.
➦ If you wish to change beneficiaries, you should consult with an attorney and consider all of your options.
➦ There can be complications involved in beneficiary changes, and a court may need to approve them. Your decision should be documented in writing, along with reasons for the change.
➦ There is a common misconception that beneficiary changes can only occur on specific dates within a policy, but this is not true.
➦ As long as the beneficiary change occurs before the policy anniversary, they can change on any date within the policy.
Incorrect Answer Explanation
a) Only upon the request of the revocable beneficiary:
➦ This option is incorrect because beneficiary changes can be initiated not only by the revocable beneficiary but also by the policyholder.
➦ Depending on the terms of the policy, the policyholder typically has the authority to change beneficiaries at any time.
➦ While revocable beneficiaries may have the authority to request beneficiary changes, it’s important to note that policyholders typically retain the ultimate authority to make these changes.
➦ Revocable beneficiaries may need to provide consent or be notified of changes, but they alone cannot initiate beneficiary changes.
b) Only on specified dates within the policy:
➦ This option is incorrect because beneficiary changes are not typically limited to specific dates within the policy.
➦ They can usually be made at any time during the policy term, subject to the terms and conditions of the policy.
➦ Insurance policies usually offer flexibility regarding beneficiary changes, allowing policyholders to update beneficiaries as their circumstances change.
➦ While some policies may include provisions for specific dates or events when beneficiary changes can occur, such restrictions are not typically the sole means of changing beneficiaries.
d) At no time:
➦ This option is incorrect because, as mentioned earlier, beneficiary changes are generally allowed during the policy term, subject to the terms and conditions of the policy.
➦ This option is incorrect as it contradicts the standard practice of allowing beneficiary changes during the policy term.
➦ Restricting beneficiary changes at all times would significantly limit the flexibility and utility of the insurance policy, potentially causing issues for policyholders who need to update their beneficiaries due to changes in relationships or other circumstances.
➦ So, option c is the answer as it accurately reflects the typical practice regarding beneficiary changes in insurance policies.
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I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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