What is a "rider" in insurance?

A "rider" in insurance refers to an additional provision that modifies a policy. This allows policyholders to customize their insurance coverage by adding specific benefits or enhancements that are not included in the standard policy. Riders can be used to increase coverage limits, add coverage for specific risks, or provide additional benefits tailored to the individual needs of the policyholder. An example of a rider might be a critical illness rider that pays out a lump sum upon diagnosis of a specified illness.

By utilizing riders, policyholders have the flexibility to adapt their insurance to better suit their personal situations and potential risks they wish to mitigate. This customization is a significant advantage for both insurers and insureds, as it helps ensure that coverage aligns closely with the individual's circumstances and needs.