What is the benefit of having riders on an insurance policy?

Having riders on an insurance policy is beneficial because they allow for additional coverage or benefits beyond what is included in the base policy. Riders are specific provisions or amendments that can be added to an insurance contract, enhancing the policy's protection and tailoring it to the needs of the policyholder.

For example, a common rider in life insurance is a waiver of premium, which ensures that premiums are waived if the policyholder becomes disabled. This adds a layer of security for the insured and their beneficiaries. Other riders can provide options such as accelerated death benefits, which allow policyholders to access a portion of the death benefit if they are diagnosed with a terminal illness, or child term riders that provide coverage for a policyholder's children.

While some might think that riders could significantly decrease premium costs or simplify benefits, their primary purpose is to enhance and personalize coverage, making them a valuable aspect of many insurance policies. Therefore, the advantage of including riders is that they empower policyholders to customize their insurance according to their individual needs and circumstances.