Revocable Beneficiary

What Does Revocable Beneficiary Mean?

A revocable beneficiary is a beneficiary named in an insurance policy whom the policyholder has the right to remove or replace at any time. This provision also allows the policyholder to discontinue the policy if desired.

Insuranceopedia Explains Revocable Beneficiary

Listing a revocable beneficiary in a policy can be beneficial if circumstances change. For example, a policyholder might name their brother as the revocable beneficiary with the understanding that the payout will be shared with their other siblings. If the brother later becomes financially irresponsible or a family rift raises concerns about the fair distribution of the payout, the policyholder can change the beneficiary. Knowing the right way to make that switch helps avoid common life insurance beneficiary mistakes that sometimes delay or complicate the payout later. And when the policyholder does pass away, the named beneficiary still has to file paperwork and follow a few specific steps to collect life insurance as a beneficiary.