A provision of an insurance policy that is purchased separately from the basic policy and that provides additional benefits at additional cost. Standard policies usually leave little room for modification or customization, beyond choosing deductibles and coverage amounts. Riders help policyholders create insurance products that meet their specific needs.


For example, an accelerated death benefit rider on a life insurance policy would provide the insured with a payout while he or she was still alive, in the event of a terminal illness. The insured could use these funds to pay for medical expenses and to increase the quality of their remaining life. When the insured passes away, their beneficiaries will receive a reduced life insurance benefit, since the rider allowed a portion of the policy to be used early.

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  1. What is the difference between term and universal life insurance?

    Term life insurance is the most basic of insurance policies. It is nothing more than an insurance policy that provides protection ... Read Full Answer >>
  2. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  3. What are the biggest disadvantages of annuities?

    Annuities can sound enticing when pitched by a salesperson who, not coincidentally, makes huge commissions selling them. ... Read Full Answer >>
  4. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>
  5. How can I determine if a longevity annuity is right for me?

    A longevity annuity may be right for an individual if, based on his current health and a family history of longevity, he ... Read Full Answer >>
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