What are riders in an insurance policy?

Riders in an insurance policy refer to additional provisions or amendments that modify the coverage of the base policy. They allow policyholders to customize their insurance to better meet their individual needs. For example, a policyholder may add a rider to enhance their coverage for specific illnesses, include accidental death benefits, or provide long-term care options. These riders are critical in tailoring insurance protections, providing flexibility, and allowing consumers to pay for only the coverage they require.

The other options do not accurately describe riders. Types of policies refer to various categories of insurance products available in the market, while discounts on premiums apply to reward healthy demographics rather than to modify coverage. Penalties for early policy cancellation pertain to financial repercussions related to ending a policy prematurely and do not reflect any aspect of policy modifications or extensions. Therefore, recognizing riders as modifications to the policy is essential for understanding how to effectively utilize life and health insurance products.