What Does Absolute Beneficiary Mean?
An absolute beneficiary is a beneficiary of a life insurance plan who will, by law, remain the beneficiary unless and until they consent to changing their status as beneficiary. In other words, an absolute beneficiary is someone who is definitively a beneficiary, and other parties do not have any legal grounds for disputes nor the ability to change that status without their permission.
Insuranceopedia Explains Absolute Beneficiary
People name beneficiaries in life insurance policies and other financial vehicles to designate, in case of the former, the person to whom the insurer should pay out benefits upon the policyholder’s death, and, in case of the latter, the person who will receive certain benefits or assets in certain other circumstances. The distinction of absolute beneficiary is often used in settlements, such as divorce proceedings to clear up any legal disputes over beneficiary rights. The naming of absolute beneficiaries is legally fixed. In other words, there is no going back once an absolute beneficiary has been named and put in place in accordance with the law without the former’s consent.