Choosing the Right Beneficiary: What Margaret May Needs to Know

In naming her husband as the beneficiary while retaining ownership rights, what type of beneficiary should Margaret May designate?

• A. Irrevocable beneficiary
• B. Contingent beneficiary
• C. Revocable beneficiary
• D. Primary beneficiary

Answer: (C)

In the scenario where Margaret May wishes to name her husband as the beneficiary while retaining ownership rights of the policy, the appropriate designation would be a revocable beneficiary. When a beneficiary is designated as revocable, the policyowner retains the ability to change the beneficiary at any time without the consent of the current beneficiary. This is particularly important for Margaret, as maintaining ownership rights implies that she may want the flexibility to alter her beneficiary arrangement in the future or respond to changing circumstances. Thus, by choosing a revocable beneficiary, she can ensure that she retains control over her policy and its benefits. Other types of beneficiaries, such as an irrevocable beneficiary, would not allow her to make changes without the beneficiary's consent. A contingent beneficiary is someone who receives the death benefit only if the primary beneficiary is unable to do so, which does not align with Margaret's intent to directly name her husband as the primary recipient. Likewise, while a primary beneficiary is an important designation, it does not offer the same flexibility as a revocable beneficiary regarding the rights of the policyowner to change or revoke that designation later.

When it comes to life insurance policies, choosing the right beneficiary can feel a bit daunting. Just like picking a favorite movie, it’s important to consider your options carefully—especially when emotions and finances are on the line. So, what’s the scoop for someone like Margaret May, who’s looking to name her husband as the beneficiary while keeping ownership rights in her pocket? The answer is as clear as a Texas sky: she should choose a revocable beneficiary.

Now, let’s break this down. A revocable beneficiary means that Margaret has the flexibility to change her mind down the road. Life is always throwing curveballs, right? Maybe her husband doesn’t end up being the sole person she wants to name, or life circumstances change. By selecting a revocable beneficiary, she safeguards her ability to maintain control over her policy. This makes it the best option for someone who insists on keeping ownership rights while wanting to back her partner.

If you’ve ever been in a situation where you’ve regretted a decision, even just a little—whether it was a hairstyle or a badly chosen dessert at a restaurant—you know how crucial it is to have the option to correct course without needing someone else’s blessing. That’s essentially what it feels like for Margaret when designating her husband as her beneficiary.

Now, you might be wondering, “What about other types of beneficiaries?” Good question! An irrevocable beneficiary would tie her hands. This kind of designation means that once the beneficiary is named, Margaret cannot change it without their consent. Imagine promising your cousin that they’d get your vintage baseball card collection, only to realize a few months later that maybe they’d rather have the concert tickets instead! You'd be stuck.

Then, there's the contingent beneficiary, who only steps in if the primary beneficiary—Margaret's husband, in this case—can’t take the death benefit for any reason. While this designation can be useful in some scenarios, it doesn’t resonate with the goal of naming her husband directly. And while we’re on it, a primary beneficiary may sound appealing, it doesn’t provide that sweet, sweet flexibility that a revocable designation does.

If we think about it in everyday terms, it’s like having a gym membership. You want the ability to switch gyms if the vibe isn’t right, or maybe if they don’t have the right classes you enjoy. A revocable beneficiary is that magic key, allowing you to adjust your plans as life twists and turns. In a world full of uncertainties, wouldn’t you want that freedom?

So, bottom line? By selecting a revocable beneficiary, Margaret can rest easy knowing she made the right choice—one that keeps her options open while still protecting her family’s future. It’s about creating a safety net, not just financially but emotionally as well. Before diving deep into policy details, always consider what’s best for your circumstances. It’s a big decision, but with the right knowledge, it doesn’t have to feel overwhelming.