Amendment Definition

The Dictionary of Insurance Terms and Definitions

An amendment is any change to an original life insurance product.

This is a useful concept to understand because when you buy life insurance, it isn't as if you sit down with an insurance agent and pen a life insurance contract on the spot.  Rather, a life insurance company designs a number of standard policies and calculates in advance at what price it can afford to sell each policy to customers of each possible rate class.  Because life insurance policies are planned in advance and then mass produced, term life insurance quotes can be retrieved instantly through automated, online quoters, allowing you to make swift comparison and appraisal of your options.

When you shop for life insurance, you choose one of the insurer's standard policies.  Because it was not tailored to you specifically, it might not meet your needs perfectly, but you can make it fit your needs better through the use of amendments.  Riders are common examples of amendments.

For instance, if a term life insurance policy with a 20-year term approximates your needs but you want a policy that will only pay out if both you and your spouse die, then you may find a most affordable solution in buying a 20-year term policy and attaching a spouse rider to it.