What is a "rider" in insurance?

A "rider" in insurance refers to an additional provision added to a policy that modifies its coverage. Riders allow policyholders to customize their insurance to better meet their individual needs by adding, altering, or expanding the benefits provided by the base policy. For instance, common riders include options for critical illness coverage, accidental death benefits, or waiver of premium in the event of disability.

The flexibility of riders makes them valuable tools for policyholders looking to tailor their insurance coverage. By integrating these provisions, individuals can enhance their financial protection in specific situations that may not be fully addressed by the standard policy. This customization is particularly important in life insurance, where needs can vary significantly from one individual to another.

On the other hand, the other options do not align with the definition of a rider. The option to cancel the policy is a standard contractual right rather than an enhancement to coverage. A type of permanent insurance refers to a category of life insurance and does not indicate any additional provisions nor modifications, and a discount offered on premiums relates to pricing rather than adjustments to policy benefits.