Tennessee Insurance Practice Exam

If M names his son as the beneficiary of an accidental death and dismemberment policy and retains the ability to change this designation at any time, what type of beneficiary is his son?

1. Permanent beneficiary

2. Contingent beneficiary

3. Revocable beneficiary

4. Irrevocable beneficiary

The correct answer is: Revocable beneficiary

When M names his son as the beneficiary of the accidental death and dismemberment policy and retains the ability to change this designation at any time, the son is classified as a revocable beneficiary. This term indicates that the policyholder retains the right to alter the beneficiary designation by removing the son and possibly replacing him with another beneficiary in the future, or even designating multiple beneficiaries. In this circumstance, if the designation were described as irrevocable, it would mean M could not change the beneficiary without the son's consent, which is not the case here. A permanent beneficiary typically implies a more stable or enduring designation but lacks the specific context of rights to alterations, while a contingent beneficiary is someone who would receive benefits only if the primary beneficiary is unable to do so. Since M can change the beneficiary whenever he wishes, the correct classification for his son is that of a revocable beneficiary.