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3. Types of Policies and Riders

This chapter introduces the major types of life insurance products, along with their features, structural characteristics, and practical uses. While life insurance policies vary widely in design, all policies fall into one of two broad categories: temporary (term) or permanent coverage. In addition, policies may be structured as fixed or variable, depending on how benefits and cash values are determined. The chapter concludes with an examination of policy riders—optional provisions that modify, expand, or customize the base policy to better meet the policyowner's financial objectives.

📄️ 3.6 Life Insurance Policy Riders

An amendment or rider alters the provisions of a life insurance policy by expanding or restricting coverage, or by excluding specific conditions. Riders are optional and are generally selected at the discretion of the insured. In most cases, riders require an additional premium and remain in force for a defined period as stated in the policy. Many riders terminate at a specified age, such as age 65. When a rider expires, the associated additional premium is discontinued. Riders are most commonly added at the time the policy is issued. If a rider is requested after the policy has been issued, evidence of insurability is typically required.