South Carolina Life and Health Practice Exam

When can a beneficiary change occur in an insurance policy?

1. Only during the annual policy review

2. At the insurer's discretion

3. Normally at any time during the policy term

4. Only upon the death of the policyholder

The correct answer is: Normally at any time during the policy term

A beneficiary change in an insurance policy can typically be made at any time during the policy term, as long as the policyholder is alive and has the right to make such a change. This allows the policyholder flexibility in adjusting their financial plans or personal circumstances, such as marriage, divorce, or changes in relationships. This means that the policyholder can add or replace beneficiaries without waiting for specific intervals, provided that they follow the procedures established by the insurance company. In some situations, there may be specific requirements or paperwork that needs to be completed; however, the general rule is that beneficiaries can be updated whenever necessary to reflect the policyholder's current wishes. This capability is crucial for ensuring that the intended individuals receive the benefits provided by the policy upon the policyholder's death.