What are policy riders in life insurance?

Policy riders in life insurance are additional features that can be added to a standard insurance policy, typically for an extra cost. These riders allow policyholders to customize their coverage, tailoring it to better fit their individual needs or circumstances. Common examples of riders include accelerated death benefit riders, waiver of premium riders, and term conversion riders. By adding these features, policyholders can enhance the protection provided by their base policy, ensuring that it covers specific risks or provides additional flexibility in various situations.

The incorrect answers do not accurately define riders. Mandatory policy features refer to aspects of the policy that must be included and are not optional add-ons. Options that reduce the cost of premiums do not capture the essence of riders, which usually entail additional costs for added benefits. Lastly, limitations on the policy coverage do not reflect the nature of riders, as they are intended to provide more options and benefits rather than restrictions.