What does 'term rider' refer to in the context of life insurance?

In the context of life insurance, a 'term rider' refers to an additional coverage option that provides extra benefits for a specified term. This means that policyholders can add this rider to their base policy to enhance their coverage temporarily, usually for a certain number of years. A term rider allows for increased protection, often at a lower cost compared to purchasing a separate term policy, as it integrates with an existing life insurance policy. Typically, this type of rider is used to secure an additional sum insured that pays out only if the insured dies during the specified term of the rider.

This setup is particularly beneficial for those who may have growing financial responsibilities, like a mortgage or children's education, during a certain period in their lives and want to ensure their loved ones are financially protected if something were to happen to them before that term ends. While whole life policies are permanent and have different characteristics, and certain riders or provisions may eliminate coverage under specific circumstances, none apply to the primary definition of a 'term rider' as it relates to the supplemental and temporary nature of the coverage it provides.