Texas Life Agent Practice Exam

Which of the following is typically not considered an owner's right under a life insurance policy?

1. Changing an irrevocable beneficiary

2. Borrowing against the cash value

3. Naming a beneficiary

4. Choosing the amount of coverage

The correct answer is: Changing an irrevocable beneficiary

Changing an irrevocable beneficiary is typically not considered an owner's right under a life insurance policy because once a beneficiary is designated as irrevocable, the policy owner cannot change that designation without the consent of the beneficiary. This means that the beneficiary has a vested interest in the policy, and their agreement is required for any amendments related to their status. In contrast, borrowing against the cash value, naming beneficiaries, and choosing the amount of coverage are rights generally retained by the policy owner. Owners can access the cash value of their policy through loans, freely name or change beneficiaries (in the case of revocable designations), and select the coverage amount when purchasing the policy, making these rights fundamental aspects of life insurance ownership.