What is the function of a term rider in a life insurance policy?

The function of a term rider in a life insurance policy is to offer temporary insurance benefits alongside a permanent policy. This means that a policyholder can add a term rider to their permanent life insurance policy, which typically provides a higher amount of coverage for a specified term—such as 10, 20, or 30 years—while maintaining their longer-lasting permanent coverage. The term rider allows individuals to secure additional coverage during critical periods, such as when they have dependents or financial obligations that they want to protect.

This arrangement is particularly beneficial because it complements the permanent structure of the insurance policy, usually at a lower cost than purchasing a separate term policy. The enhanced coverage from the term rider helps the insured secure financial protection during a period of increased need, without surrendering the long-term benefits of their permanent policy, such as cash value accumulation or lifelong coverage.