What is a rider in an insurance policy?

A rider in an insurance policy refers to an optional provision that allows policyholders to add specific benefits or coverage to their existing policy. This customization enhances the basic insurance plan by tailoring it to the individual needs of the policyholder. For example, riders can provide additional protection for specific events or circumstances that may not be covered under the standard policy. They typically do require an additional premium, reflecting the extra risk that the insurer is taking on by extending this coverage.

The significance of riders lies in their flexibility. They enable policyholders to modify their insurance contract to better fit their life situation, whether that's adding coverage for critical illness, accidental death, or waiver of premium benefits, among others. This makes riders an important tool for policyholders seeking personalized coverage solutions.