Insurance Rider
An optional add-on provision that modifies or extends the base coverage of an insurance policy.
What is Rider?
An insurance rider, also called an endorsement, floater, or addendum, is an optional modification to an existing insurance policy that either expands coverage, adds new benefits, or limits certain exclusions in exchange for an additional premium. Riders allow policyholders to customize coverage without purchasing an entirely new policy. Common life insurance riders include accidental death benefit (pays an extra benefit if death results from an accident), waiver of premium (waives premiums if the insured becomes disabled), and long-term care (accelerates the death benefit for qualifying care expenses). Disability insurance riders often include cost-of-living adjustment (COLA) and future increase options. Health riders may add dental or vision coverage.
Example
A 40-year-old buys a $500,000 whole life insurance policy and adds a waiver of premium rider for $15 extra per month. Two years later, he suffers a disabling injury and cannot work. Because of the rider, the insurer waives all future premium payments while keeping the policy in force — preserving $500,000 in death benefit for his family without requiring a payment from his disability income.
Source: National Association of Insurance Commissioners — Life Insurance