What does an irrevocable beneficiary designation imply?

An irrevocable beneficiary designation implies that once a policyholder designates a beneficiary as irrevocable, they cannot change that designation without the consent of the named beneficiary. This means that if the policyowner wants to make any changes, such as changing the beneficiary to someone else or altering the terms of the benefit, they must obtain permission from the irrevocable beneficiary. This protects the rights of the irrevocable beneficiary, ensuring that they retain their claim to the benefits as stated in the policy.

This arrangement is important in estate planning and ensures that the designated beneficiary has a level of security regarding their rights to the policy proceeds. In contrast, a revocable designation would allow the policyholder to change the beneficiary without the other's consent, offering more flexibility but less security for the beneficiary. The other options listed are not accurate because they do not capture this essential characteristic of the irrevocable designation.