What is a rider in an insurance policy?

A rider in an insurance policy refers to an additional provision that modifies the coverage or benefits of the original policy. Riders can enhance or limit coverage, providing policyholders the flexibility to tailor their insurance to better meet personal needs. For example, an insurance policy may include a rider that adds coverage for critical illness or extends coverage for specific events not included in the standard policy. This ensures that the policyholder can customize their protection in a way that aligns with their individual circumstances or preferences.

The other options relate to different concepts within insurance. A reduction in premium refers to a discount or lower cost for the policy, which is not what a rider does. A type of insurance claim involves the request for payment based on a covered event but does not encompass the meaning of a rider. Finally, a payment to beneficiaries upon the policyholder's death is related to the death benefit of a life insurance policy, which is also distinctly different from a rider that modifies coverage.