New Jersey Life Producer Practice Exam

What type of modification is often added to an insurance policy?

1. Endorsement

2. Rider

3. Amendment

4. Addendum

The correct answer is: Rider

A rider is a type of modification that is attached to an insurance policy to expand or restrict its benefits, coverage, or terms. Riders can introduce additional features or protections that are not included in the base policy. They are often used to tailor the insurance coverage to meet the specific needs of the policyholder. For instance, a life insurance policy may include a rider that provides benefits in case of terminal illness or an accidental death benefit. This customization makes riders an important aspect of insurance policies, allowing policyholders to enhance their coverage according to their unique circumstances or requirements. Understanding the role of riders can help producers effectively guide customers in selecting policies that best suit their needs, ensuring that they are appropriately covered for various potential risks.