Endorsement

An endorsement is a document attached to an insurance policy that changes its terms. In life insurance it can be issued at delivery or later, and it becomes part of the contract. Endorsements correct errors, record administrative changes such as a new owner, add or remove a benefit, or modify a provision to comply with a particular state's law.

The terms endorsement and rider overlap and are often used interchangeably. Traditionally, a rider adds a benefit, often for an extra premium, while an endorsement amends existing language. Hypothetical example: after a term policy is issued with the insured's birth date off by a year, the insurer issues an endorsement correcting the date and adjusting the premium. Another policyholder receives a state-required endorsement that rewrites the grace period provision.

Changes that reduce benefits or add exclusions usually require the owner's written acceptance. Under the entire contract clause, the policy, the attached application and its endorsements make up the whole agreement, so keep every endorsement with the policy and read each one to see exactly what changed. See how to read a life insurance policy, section by section and where to keep your policy and who to tell about it.