What is a rider in insurance terminology?

A rider in insurance terminology refers to a document that modifies a policy's coverage. This means that it can add, exclude, or change the benefits, conditions, or terms of the original insurance policy. Riders are often purchased to enhance the basic policy and provide further protection tailored to the policyholder's specific needs.

For example, someone might add a rider for specific natural disasters not covered in their standard homeowner's policy, or a policyholder may want to increase the coverage limits on certain valuables. This adaptability and customization are significant advantages of insurance riders, making them an essential aspect of personal finance and insurance planning.

The other options do not accurately capture the definition of a rider. An additional policy that focuses solely on elderly coverage would not encompass the broader applicability of a rider. A discount on premiums does not reflect the modification aspect of a rider, and a clause explaining exclusions falls under the terms of coverage but does not describe the modifying function of a rider.