What does the term "rider" refer to in an insurance policy?

In the context of an insurance policy, the term "rider" refers to an additional provision or addendum that modifies the original terms of the policy. Riders are often used to provide extra benefits or coverage that are not included in the basic policy. For instance, a life insurance policy might have a rider that allows for accelerated benefits in the event of a serious illness, or an accidental death rider that pays additional benefits if the insured dies as a result of an accident.

Riders enhance the flexibility of insurance contracts, enabling policyholders to tailor their coverage to better fit their specific needs or circumstances. This adaptability can be critical for individuals seeking comprehensive protection or needing specific coverage options that standard policies may not provide.

Understanding the concept of riders is important for both policyholders and agents, as it helps in shaping a policy that effectively meets the insured's requirements.