What is an optional benefit in insurance terms?

An optional benefit in insurance refers to a feature or rider that a policyholder can choose to add to their insurance policy for an additional premium. This option allows policyholders to customize their coverage according to their specific needs or circumstances, which offers flexibility and enhancement to the basic policy.

For example, a life insurance policy may offer optional benefits such as accidental death coverage, waiver of premium, or a critical illness rider. By selecting these additional benefits, the policyholder pays an increased premium but gains additional protections that may be valuable to them.

In contrast, an automatic benefit given at no extra cost is a standard feature of the policy, and it does not require an additional premium. A benefit available only to high-risk individuals implies restrictions on who can obtain it based on risk assessment, which does not describe the nature of optional benefits. Lastly, a feature that cannot be modified once selected does not accurately portray optional benefits since most can be added or removed based on the policyholder's preferences and changing needs. Thus, the correct understanding of optional benefits highlights their customizable role in enhancing insurance coverage.