SumitA revocable beneficiary is a legal tool that allows a policy to be changed before a beneficiary passes away. A revocable beneficiary is used to change a beneficiary who is a minor, grandparent, or person who has previously passed away.
Most policyholders are aware of this option and most have never thought about the revocable beneficiaries, but as long as they’re aware, can they change a beneficiary before a person lives to regret it? You bet they can. The problem is, most aren’t aware of the details of what a revocable beneficiary is and how to change one.
Policy and insurance companies have always been aware of the revocable beneficiary. But it wasn’t until the “death benefits” amendment in 1974 that policyholders were able to change beneficiaries after a life occurs. Now, with the revocable beneficiary, policyholders can change a beneficiary before it passes away. However, before you can do this, you need to have a certificate from the life insurance company that the policy has been amended since you last changed beneficiary.
I have a friend who has a policy that says he can change his beneficiary. His death was in July and he had changed the beneficiary within the last month. However, the death certificate is from almost 30 years ago, and the change was on the life insurance company website.
This is a good example of a change on the life insurance company’s website that is not listed on the death certificate. The change should list the deceased person, and there should be a clear date on the certificate to show when the change was made.
I think revocable/revocable beneficiary may be a good topic for a later blog post. I think we’re all aware of the many stories of people who change a beneficiary. It can be caused by health problems, family problems, and financial problems…I don’t want to get too wordy here, but in general, this happens because there is a problem with the life insurance company’s records.
In some cases, the owner changes the beneficiary on the policy. In other cases, the owner changes the beneficiary before the death. There are two reasons for the owner to change the beneficiary. First, the policy may not have been purchased with the policy owner’s consent. Second, the homeowner could be in breach of the policy’s terms.
In the case of the last scenario, the policy is probably void. As such, the policy owner should be able to change the beneficiary so that the policy owner is not named as a beneficiary. This is legal, but there are a few reasons why this may not be a good idea. For example, suppose the policy owner is also the policy holder. Perhaps the policy owner and the policy holder are both estranged spouses.
There are many reasons why it’s not recommended to change the beneficiary. For example, if the policy owner is the policy holder but the policy owner is also the policyholder, this makes the policy owner the beneficiary even if the policy owner is deceased. Also, if there is a joint account between the policy owner and the policy holder, the policy holder could be the beneficiary, which would make the policy owner the beneficiary even though the policy owner is deceased.
If the policy owner is no longer alive, though, it’s best to change the beneficiary, because the policy owner is no longer the beneficiary. But the policy owner and the policy holder are not the same person.
