What is a "rider" in an insurance policy?

A "rider" in an insurance policy refers to an additional coverage option that modifies the standard terms of the policy. Riders allow policyholders to customize their insurance coverage by adding specific provisions that enhance the base policy or provide coverage for particular risks that may not be included. For example, a life insurance policyholder might add a rider to cover accidental death or to include a waiver of premium under certain conditions. This flexibility helps consumers tailor their insurance to better suit their individual needs and circumstances, ensuring more comprehensive protection.

In contrast, the other options do not accurately define a rider. A temporary suspension of coverage refers to a lapse or pause in the protection provided by the policy, rather than an enhancement. A penalty for non-compliance is related to breaches of policy terms or regulations, which does not connect to adding coverage. Lastly, insurance fraud involves deceitful practices aimed at obtaining an undeserved benefit, which is fundamentally different from the legitimate modification of policy terms through a rider.