What is a term rider?

A term rider is effectively a provision that allows an individual to add a term insurance component to an existing permanent life insurance policy. This additional coverage typically provides a death benefit for a specified period at a lower cost compared to a permanent policy.

The essential benefit of including a term rider in a permanent policy is that it offers additional flexibility in coverage without the need to purchase a separate term policy. This option is particularly appealing for individuals seeking more affordable temporary coverage that fits within the broader structure of their permanent life insurance.

In contrast, the other choices describe different aspects of life insurance but do not accurately represent what a term rider entails. For instance, a waiver of premium pertains to a feature that prevents premium payments due to a policyholder's disability, a convertible term policy refers to a term policy that can be exchanged for a permanent policy, and a renewable term policy allows a policyholder to renew a term policy at the end of its term without additional underwriting, which does not fit the definition of a term rider.