Define policy rider and describe the purpose of the five basic ones

What will be an ideal response?

Answer: A rider is a special provision that may be added to your policy, which either provides extra benefits or limits the company's liability under certain conditions. A waiver of premium for disability rider allows your insurance protection to stay in place by paying your premiums if you become disabled before you reach a certain age, usually 65. An accidental death benefit rider or multiple indemnity rider doubles or triples the death benefit when the insured dies from an accident rather than from natural causes.

The guaranteed insurability rider gives the right to increase your life insurance protection in the future without a medical examination. A cost-of-living adjustment rider increases the death benefit at the same rate as inflation without forcing you to pass a medical exam. Some cash-value policies allow for living benefits; that is, this rider allows for early payout of a percentage of the anticipated death benefits for the terminally ill, enabling them to pay medical bills, etc.