What is the difference between a "rider" and a "policy"?

The correct answer highlights that a rider adds coverage options to an insurance policy, which serves as the main contract between the insurer and the insured.

In the context of insurance, a policy is the foundational document that outlines the terms, conditions, and coverage provided by the insurer. It is the primary agreement that details the rights and obligations of both parties. On the other hand, a rider is an amendment or an additional provision that can be attached to a policy to modify its coverage. Riders allow policyholders to customize their insurance plans according to their specific needs, such as adding coverage for critical illness or changing the payout structure.

Understanding this distinction is essential because it emphasizes how riders enhance or alter the existing coverage provided by the main policy, rather than serving as standalone documents. This customization through riders allows insured individuals to tailor their coverage to better suit their circumstances, ultimately providing greater flexibility in managing risk.