How do riders typically affect insurance policies?

Riders are additional provisions or amendments added to an insurance policy that provide extra benefits or coverage options tailored to the policyholder's needs. When you add a rider to a life insurance policy, you are effectively enhancing the policy's features, which often means there will be an additional cost associated with that rider.

For instance, a common rider might provide accelerated death benefits in case of a terminal illness, or it may offer a waiver of premium if the insured becomes disabled. While these riders do enrich the policy by offering more comprehensive coverage in specific situations, policyholders typically incur a higher premium or a one-time fee for these enhancements. This reflects the principle that increased benefits involve additional costs in the context of insurance.

The other options do not accurately describe the fundamental nature of riders. Riders do not generally increase cash value, extend coverage automatically, or reduce premium costs; instead, they are designed to tailor existing policies to meet specific life circumstances or needs at a premium cost.