An irrevocable beneficiary is a person or entity designated to receive the proceeds of a life insurance policy, annuity or trust that cannot be changed or revoked by the policyholder or grantor without the beneficiary’s consent.
Once an individual or entity is designated as an irrevocable beneficiary, the policyholder or grantor cannot make changes to the beneficiary designation, such as removing or adding beneficiaries, without the beneficiary’s written consent. This is different from a revocable beneficiary, which can be changed at any time without the beneficiary’s consent.
Irrevocable beneficiaries are typically used in situations where the policyholder or grantor wants to ensure that a specific person or entity will receive the proceeds, such as in cases of divorce, second marriages, or providing for children or disabled individuals. Irrevocable beneficiary designations can also have tax implications, so it is important to consult with a financial advisor or attorney before making any changes to beneficiary designations.