Life Insurance: Revocable vs. Irrevocable Beneficiary Designations

Life insurance policies can have either a revocable or irrevocable beneficiary designation.

A revocable beneficiary can be changed by the owner of the policy without the signature of the beneficiary. Most life insurance policies in Canada have Revocable beneficiary designations.

An irrevocable beneficiary requires the beneficiary to sign off on any policy changes. Therefore, should the policy owner wish to change the beneficiary on a policy where an irrevocable beneficiary exists, both the policy owner and the irrevocable beneficiary must sign off on it.

Irrevocable beneficiary designations are often given as part of a separation agreement or a divorce settlement. Because irrevocable beneficiaries have extraordinary powers, it is crucial that the policy owner be made aware of these powers should such a designation be made.

The type of policy does not impact a beneficiary designation.  Whole Life Insurance, Universal Life Insurance, or Term Life Insurance policies can have the beneficiary as Revocable or Irrevocable or vice versa.  Life Insurance beneficiaries can be 1 person or multiple persons.

One important point for multiple beneficiaries on no electronic applications make sure the hand writing is legible.  Many applications only leave space for two or three names as beneficiaries so the broker might try and squeeze in this information.  If the hand writing is not legible this could create some complications at the time of claim.

There is no cost to changing your beneficiary designation and you can change it more than once.  Most insurance companies have a form for the applicant to complete.  This form can be obtained by your insurance advisor or by contacting the insurance company directly.  In the event a form is not available you can send a signed letter specifying the beneficiary changes you would like. Make sure you receive confirmation from the insurance confirmation from the insurance company that the change has been made and keep this documentation with the policy.

For older policies its a good idea to contact the insurance company to make sure you have the correct beneficiary, the beneficiary designation listed in the policy document could have been changed and the supporting documentation may not have been attached to the policy.

If the beneficary is a minor the insured should name a trustee.  This person will look after the funds until the beneficary reaches age 18.  Another good tip is to make sure your beneficiary or trustee know about all your life insurance policies give them a summary of the policy numbers with insurance company / broker contact details so they know who to contact just in case they can not find the policy.

For more details on beneficiary designations in Canada, please contact us at 1-866-899-4849 or contact us by e-mail at [email protected]

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  • Joe
    March 11, 2019 at 8:05 pm

    In Canada. My question is, say I have a friend (couple) the wife is the only owner and payer of their life insurance policy. Unfortunately, they separated and the irrevocable beneficiary of 30% percent of the husband is their underage child, and the child has a Trustee written in the policy. Does the trustee have the power to sign on behalf of the underage beneficiary, when the wife (owner) wants to cancel the entire policy?

    • LSM Insurance
      March 12, 2019 at 9:02 am

      Joe, I would contact the insurance company and get your response in writing. Have a nice day!

  • Stephenie
    February 27, 2019 at 1:46 pm

    Hi, I have a friend in BC that recently lost her husband. It turns out that he never named her as a beneficiary on his life insurance after they were married, and still had his two nephews listed. I know that in the US (where I am), a qualifying life event like marriage will automatically change the beneficiary to the spouse, even if the designation on the beneficiary form didn’t change. Does the same hold true in Canada, or does marriage not have the same impact on named beneficiaries on a life insurance policy there?

    • LSM Insurance
      February 28, 2019 at 3:00 am

      Thanks for the note. Our understanding is marriage does not automatically change your beneficiary designation in Canada. But you should check with your insurance provider and ask for your answer in writing if you have specific questions

  • Tom
    January 20, 2019 at 4:58 pm

    I was married in Quebec and bought life insurance.We moved to Ontario and were divorced. In the separation agreement it was stated that my ex. could not touch my life insurance. Can i change the beneficiary without getting permission from my ex.

    • LSM Insurance
      March 8, 2019 at 9:04 am

      Hi Tom, You would have to check with your insurer and be sure to get your response in writing. REgards

  • RAZA
    November 8, 2018 at 1:22 am

    Either Group Insurance policies are Revocable or Irrevocable?

    • LSM Insurance
      November 8, 2018 at 7:56 am

      In most instances they should be revocable

  • Level Mind
    May 19, 2014 at 11:38 am

    Is there a cost to change my life insurance beneficiary and is there a maximum number of life insurance beneficiaries I can choose?

    • LSM Insurance
      May 19, 2014 at 12:47 pm

      Thanks for the note. There is no cost for changing your beneficiary and you can put multiple beneficiaries on you policy but you may have to write a separate letter listing them as many forms only leave a limited amount of space.

  • Lynn
    February 3, 2014 at 4:53 am

    Hi, I’m hoping someone could clarify some confusing mixed information I’m receiving. Can a beneficiary be changed legally by a court Judge after the policy holder has past if: the named beneficiary no longer goes by the legal name as stated on the policy and is no longer the said spouse ex: Jane Doe – spouse, and that before the unexpected passing the policy holder had full intentions and started the process to have the beneficiary name changed but due to a life change was unable to complete the process. Plzzzz help the very confused person if at all possible. thanks you for your time.

    • LSM Insurance
      February 3, 2014 at 11:21 am

      Normally to change a beneficiary the owner and in the case of an irrevocable beneficiary (owner and beneficiary) must sign the policy.

      Having said that I have never ran across the situation you are referring to. You could contact the insurance company or a lawyer specializing in this type of thing.

  • LSM Insurance
    January 18, 2014 at 1:48 pm

    You could first try explaining what happened to your fathers former company. Maybe they did not have a record of the irrevocable beneficiary designation.

  • Tonya
    January 18, 2014 at 1:48 pm

    Hi, I was hoping someone may be able to help. I am the irrevocable beneficiary on my fathers life insurance with …… through a divorce judgment. He has since passed and his new wife signed her name on the policy as the beneficiary. Do I forward the papers to …. or do I need a lawyer?

  • Linda M
    November 15, 2013 at 7:04 pm

    Many years ago i have named the benificiary of my life insurance My husband.Irrivocable! Have been divorced for almost 13 years now and i would like to change the benificiary, to my sister.. What can i do to change it?

    • LSM Insurance
      November 16, 2013 at 9:25 am

      You would have to check with the insurance company but if your ex-husband is listed as an irrevocable beneficiary both you and he would have to sign to change the beneficiary.

  • dawn M
    November 3, 2013 at 6:08 am

    Hi,I have a question for you,
    my Aunt passed away 1 yaer ago and I still haven’t fone my benefit , life insurance left to me, my brother is the executive of her will and because he got real crazy and went a head and spent 19 grand on her funral expence without see if aunt had the cash for this,and not alkiing to the 5 others
    to see if we could kick in some money,,,what to do,…

    • LSM Insurance
      November 3, 2013 at 11:18 am

      Sorry to hear that Dawn. But I’m not sure what you are asking. Are you sking if you are a beneficiary wunder your Aunt’s policy. You would have to check with the broker or the insurance company.

  • Betty
    September 25, 2013 at 11:31 am

    I was told that if something were to happen to me and I had to be placed in a special care home that my family would have to sign over my life insurance policy to the home, regardless of the beneficiary, if it wasn’t set up as ‘Irrevocable’…is this true? Should I be calling my policy holder to have it changed to protect my family?

    • LSM Insurance
      September 25, 2013 at 12:32 pm

      No only policy owner can change the beneficiary unless you have made other arrangements.

  • Kennedy
    September 18, 2013 at 3:38 am

    Are the proceeds paid out the same way in terms of taxes if the beneficiary is revocable or irrevocable.

    • LSM Insurance
      September 18, 2013 at 8:26 am

      The beneficiary designation does impact the taxability of a policy.

  • George
    August 29, 2013 at 4:07 am

    Will my mothers beneficiary be listed in her policy document?

    • LSM Insurance
      August 29, 2013 at 9:52 am

      It may be. But the beneficiary may have also changed since the policy was taken out. Your mother could contact her insurance company to verify the current beneficiary breakdown on her policy.

  • Garcia
    June 25, 2013 at 12:29 pm

    Can changing the beneficiary change my policy. I mean can the ins. co. change my premiums or plan

    • LSM Insurance
      June 25, 2013 at 2:31 pm

      Thanks for the note. No changing the beneficiary can not change your policy features.

  • LSM Insurance
    November 9, 2012 at 12:30 pm

    Thanks for the note. Each insurance company analyses risk differently and have different underwriting criteria. Other variables like your family health history and other medical or lifestyle issues will also influence your ability to obtain preferred rates.

  • Arthur
    November 9, 2012 at 6:08 am

    I had high blood pressure in the past but I’m fine now can I still get preferred rates?

  • LSM Insurance
    October 31, 2012 at 8:31 am

    Yes you can split your beneficiary among multiple people.

  • Terry
    October 31, 2012 at 6:50 am

    Can I split my beneficary among multiple people are does it all have to go to one person/