What type of beneficiary designation allows the owner to retain the right to change it?

The designation that allows the owner to retain the right to change it is known as a revocable beneficiary. In this arrangement, the policyholder maintains control over the beneficiary status and can modify it at any time without needing the consent of the currently designated beneficiary. This flexibility is important for individuals who may want to adjust their life insurance or other financial arrangements based on changing personal circumstances or relationships.

In contrast, an irrevocable beneficiary designation restricts the policyholder’s ability to make changes. Once the beneficiary is named as irrevocable, the policyholder cannot alter or remove that beneficiary without their agreement. This provides security to the chosen beneficiary but limits the policyholder’s control.

Co-beneficiaries refer to the situation where two or more individuals are named to receive benefits, which does not necessarily address the ability to change the designation. Switchable beneficiary is not a standard term in insurance terminology, further distinguishing the importance of understanding the concept of revocable beneficiaries.