Rider
An optional add-on provision to a life or health insurance policy that provides additional benefits or modifies base coverage.
In life and health insurance, a rider is an optional provision added to the base policy at the time of purchase or sometimes later. Riders allow policyholders to customize coverage for their specific needs. Common life insurance riders include the waiver of premium rider (waives premiums if you become disabled), the accelerated death benefit rider (allows early access to death benefits if terminally ill), and the child term rider (provides small death benefit for children at low cost).
Health insurance riders may add coverage for specific conditions, vision, dental, or critical illness benefits not included in the base plan. Disability income riders on life policies can provide monthly income replacement if a covered illness or injury prevents you from working.
Riders typically add to the premium. Evaluate each rider based on your personal risk profile—a waiver of premium rider is valuable if your career poses disability risk; an accelerated death benefit rider is especially valuable if you have dependents and health concerns. Read the definitions carefully, as "disability" and "terminal illness" have specific contract definitions that may differ from common usage.
Real-World Example
The life insurance policyholder added a waiver of premium rider for $15/month; when he became disabled, the insurer continued his $500,000 policy without further premiums.