Why might a policy owner choose an irrevocable beneficiary?

Choosing an irrevocable beneficiary in a life insurance policy primarily serves to ensure that the beneficiary designation cannot be changed without the consent of the irrevocable beneficiary. This means that the policy owner forfeits the right to alter who will receive the policy's death benefit upon death without obtaining permission from the irrevocable beneficiary.

This choice provides a layer of security and commitment regarding the proceeds of the insurance policy, making it particularly appealing in situations where the policyholder wants to guarantee that a specific individual, such as a spouse or a child, will receive the benefits, regardless of any future changes in personal relationships or circumstances. Such a designation cannot be modified easily, which protects the interests of the beneficiary.

The other options pertain to aspects of life insurance that do not inherently relate to the purpose or implications of selecting an irrevocable beneficiary. For instance, maximizing dividend payments, lowering insurance premiums, and increasing cash value accumulation may be influenced by different factors, such as the type of policy selected or the insurer's performance, but they do not directly tie back to the beneficiary designation's irrevocability.