What is the purpose of a “rider” in an insurance contract?

A rider in an insurance contract serves to amend the terms of the policy by adding specific provisions or additional coverage. This feature allows policyholders to customize their insurance to better meet their individual needs. For example, a rider may add coverage for certain risks that are not included in the standard policy, such as additional benefits for specific events or protection for particular items.

This customization is valuable as it allows policyholders to enhance their coverage without needing to purchase a separate policy. The incorporation of riders supports the flexibility of insurance contracts, enabling policyholders to adjust their coverage in accordance with changes in their life circumstances or needs.

The other options, while relevant to aspects of insurance policies, do not accurately describe the primary function of a rider. Riders specifically add or modify coverage rather than just affecting the premium, limiting coverage, or defining exclusions.