What does a 'life insurance rider' provide?

A life insurance rider is an add-on to a standard life insurance policy that provides additional benefits or enhanced coverage tailored to the policyholder's needs. Riders allow policyholders to customize their insurance plans by adding specific provisions that can address particular requirements or situations.

For instance, common riders include the accelerated death benefit rider, which allows the policyholder to receive part of the death benefit while still alive in the event of a terminal illness, or the waiver of premium rider, which waives future premiums if the insured becomes disabled. These enhancements can significantly broaden the policy's scope and offer increased flexibility and financial security to the insured and their beneficiaries.

Understanding riders is crucial because they show how a basic life insurance policy can evolve to meet changing life circumstances. Other options in the question do not pertain to the concept of riders; they refer to aspects like adjusting premium rates, policy cancellation options, or financial reporting, none of which contribute to the additional coverage characteristic of riders.