Irrevocable Beneficiary

Definition

• A beneficiary of a life insurance policy or segregated fund whose benefit cannot be modified by any party without their consent. For example, in a divorce settlement, an alimony collecting spouse may be named as an irrevocable beneficiary on a life insurance policy to protect their financial interests in the event that the support paying individual passes away. Also known as an "absolute beneficiary."

Synonyms
absolute beneficiary, permanent beneficiary

Related Terms and Acronyms

• Beneficiary — Definition,
  • An individual or entity chosen to receive benefits from a will, trust, deed or insurance policy.
• Child Support (CS) — Acronym,
  • Monthly payments that contribute to the care of a child. Payments must be received continuously for one year to be counted toward qualifying income for a loan.
• Contingent Beneficiary — Definition,
  • A beneficiary who only receives his or her benefit when specific conditions have been met.
• Contract — Definition,
  • An agreement between two or more parties that can be enforced by law.
• Death Benefit (DB) — Acronym, Very Important,
  • A payment or series of payments made to the beneficiaries of a life insurance policy.
  ➥ An amount paid to a beneficiary in a life linsurance policy.
• Irrevocable — Definition,
  • Unalterable.
• Letter of Credit (L/C) — Acronym,
  • A letter authorizing a person or company to draw on a bank or stating that the bank will honour the credit up to the stated amount.
• Life Insurance — Definition, Very Important,
  • An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
  ➥ CanEquity offers life insurance.
• Life Insurance Trust (LIT) — Acronym,
  • A legal entity that is made the beneficiary of a life insurance policy, often arranged to evade taxation.
• Policy Loan — Definition,
  • A loan where a life insurance policyholder's death benefit is used as collateral.
• Revocable Beneficiary — Definition,
  • A beneficiary whose benefit can be modified without his or her consent.
• Segregated Fund — Definition,
  • Investment vehicles that feature both maturity and death guarantees. Segregated funds share similarities with mutual funds but are categorized as insurance products.
• Spin-Life — Definition,
  • A financial industry that specializes in buying life insurance policies from individuals or convincing individuals to take out new life insurance policies with an investor as a beneficiary.
• Sprinkling Provision — Definition,
  • A provision that gives a trustee the authority to distribute life insurance death benefits as he or she sees fit, and to those who need the money the most.
• Trust — Definition,
  • A fund established like a will, specifying how money or property will be disbursed, lists the recipients or beneficiaries and names one or more trustees to manage the assets. An irrevocable trust can't be changed after the terms are finalized; a revocable trust has more legroom in how much can be transferred, but is usually costlier to maintain.