Minnesota Life Insurance License Practice Exam

Which type of life insurance can be modified through endorsements?

1. Term life insurance

2. Whole life insurance

3. Universal life insurance

4. Joint life insurance

The correct answer is: Universal life insurance

Universal life insurance is indeed the type that can be modified through endorsements. This flexibility is one of the distinguishing features of universal life policies. Policyholders have the ability to adjust the death benefit and premium payments within certain limits, catering to their individual needs and changing circumstances. Additional benefits, such as riders or endorsements for critical illness coverage or accidental death benefits, can also be added to the policy, enhancing its value and adaptability. In contrast, term life insurance usually provides a fixed death benefit for a specific period without the option for modifications once issued. Whole life insurance has more rigidity, as it typically encompasses fixed premiums, death benefits, and cash value growth, limiting the extent to which endorsements can alter the policy. Joint life insurance, covering two lives, similarly lacks the flexibility to be modified through endorsements in the same manner as universal life insurance. This is why universal life stands out for its adaptability and the opportunity it offers for enhancement through endorsements.