What is the purpose of a rider in a life insurance policy?

The purpose of a rider in a life insurance policy is to allow policyholders to customize their policies by adding additional benefits or features. Riders enable individuals to tailor their coverage according to their specific needs or preferences, enhancing the basic policy. For example, a common rider is an accelerated death benefit, which allows the insured to access a portion of the death benefit if diagnosed with a terminal illness. This flexibility means that policyholders can address individual circumstances, providing them with tools to better meet their insurance requirements without having to purchase a completely new policy.

The other options don't align with the concept of riders. Riders typically do not aim to reduce premium costs directly; rather, they usually add to the total premium. Also, they do not eliminate the need for underwriting, as many riders may still require additional assessment or approval based on risk factors. Lastly, riders do not shorten the policy term; they enhance the existing policy rather than changing its duration.