Revocable vs Irrevocable Beneficiary in Life Insurance | Everything You Must Know

Choosing the Right Life Insurance Beneficiary: Intro

Selecting the right beneficiary is one of the most important decisions when setting up a life insurance policy. Your choice determines who will receive the death benefit and under what conditions.
In Canada, every policyholder must choose between a revocable beneficiary and an irrevocable beneficiary.
Understanding the difference between the two helps ensure that your insurance plan aligns with your personal and family circumstances.

What Is a Revocable Beneficiary?

A revocable beneficiary is someone the policy owner can change or remove at any time, without needing the beneficiary’s consent. Most life insurance policies in Canada have revocable beneficiary designations because they offer flexibility.

Revocable Beneficiary Example

If you name your spouse as a revocable beneficiary and later wish to change it to your children or estate, you can do so easily by submitting a change form to your insurance provider. This makes sense for policyholders whose circumstances may change — for example, due to marriage, divorce, or the birth of a child.

When to choose a revocable beneficiary

• When you want full control over your policy.
• When your personal or family situation may evolve.
• When flexibility and privacy are important (the insurer does not have to notify the existing beneficiary about the change).

What Is an Irrevocable Beneficiary?

An irrevocable beneficiary cannot be changed or removed without that beneficiary’s written consent. In other words, the policy owner and the irrevocable beneficiary must both sign off on any modification to the policy, including cancelling, assigning, or withdrawing funds from it.

Irrevocable Beneficiary Example

Irrevocable designations are common in separation or divorce agreements to secure future support for a spouse or child. The irrevocable status ensures that the insured cannot later remove that beneficiary without agreement.

When to choose an irrevocable beneficiary

• When a life insurance policy forms part of a legal or financial obligation (e.g., divorce, child support).
• When you want to guarantee financial security for a dependent or ex-spouse.
• When you intend the benefit to be legally protected and unchangeable.

Because irrevocable beneficiaries have significant rights, it’s crucial that policy owners understand the implications before choosing this option.

Revocable Beneficiary vs Irrevocable Beneficiary: Key Differences

The main distinction between a revocable vs irrevocable beneficiary is the level of control and consent required to make changes.

• A revocable beneficiary gives you flexibility to modify or update the designation anytime.
• An irrevocable beneficiary restricts changes without joint consent, providing strong protection for the beneficiary but limiting the policyholder’s flexibility

Regardless of whether your policy is Term Life Insurance, Whole Life Insurance, or Universal Life Insurance, you can choose either designation type.
We have summarized everything you need to know in the table below:

Practical Tips for Managing Beneficiary Designations

1. Multiple beneficiaries:
   When listing several beneficiaries, ensure the handwriting on paper applications is clear and legible. Illegible names can delay claim processing.
2. Updating your designation:
   You can change a revocable beneficiary at no cost by completing a form from your insurer or advisor. Always confirm the change in writing and keep the documentation with your policy records.
3. Older policies:
   Contact your insurance company to verify that your beneficiary information is current. Over time, designations can be updated without proper documentation attached to the policy.
4. Minors as beneficiaries:
   If your beneficiary is a minor, appoint a trustee to manage the funds until the child reaches the age of majority.
5. Communication:
   Inform your beneficiary or trustee about the existence of your policy, the insurance company, and broker contact details so they can easily locate the policy when needed.

Changing a Revocable Beneficiary to an Irrevocable Beneficiary

Yes, you can change a revocable beneficiary into an irrevocable beneficiary — it’s a straightforward process since the revocable beneficiary doesn’t need to give consent.
To do so:

• Step 1: You complete the insurer’s “Change of Beneficiary” form or submit a written request.
• Step 2: Indicate that you wish to make the new designation irrevocable (most forms will have a checkbox for this).
• Step 3: The insurance company will then update your records and send you written confirmation.

Once the change is made, the new irrevocable beneficiary must consent to any future changes — including cancellations, policy loans, or beneficiary updates.

Changing an Irrevocable Beneficiary to a Revocable Beneficiary

This is much more complicated. You cannot unilaterally change an irrevocable beneficiary back to revocable, or replace them with someone else.
Since the irrevocable beneficiary has legal rights under the contract, the insurance company will require:

• The written consent and signature of the existing irrevocable beneficiary.
• In rare cases (e.g., if the beneficiary is deceased or cannot be located), a court order may be needed to authorize the change

We hope you found this information about revocable and irrevocable beneficiaries helpful in understanding how these designations work and which option may best suit your needs. If you have any questions or would like personalized advice, simply complete the form on this page — one of our experienced team members will reach out to walk you through all the intricacies of revocable vs irrevocable beneficiary designations.
Our team works with and understands the policies of more life insurance companies in Canada than most brokers, which allows us to provide you with unbiased, expert guidance tailored to your situation.