What is the main purpose of an impairment rider?

An impairment rider is specifically designed to address the issue of pre-existing conditions within an insurance policy. By including this rider, the insurer is able to eliminate coverage for certain health issues that existed prior to the establishment of the policy. This allows the insurance company to mitigate risk associated with insuring individuals who may have higher healthcare costs because of those conditions.

In this context, the impairment rider serves as a crucial mechanism for managing risk. When an insurer accepts a policyholder who has a pre-existing condition, they may limit or exclude coverage for that condition, effectively making the overall risk more manageable. This practice is not uncommon in the insurance industry, particularly for policies that deal with life and health.

The other options do not accurately represent the function of an impairment rider. While increasing coverage limits, allowing for additional riders, or providing discounts may be features of certain insurance policies, these do not align with the specific role of an impairment rider in addressing pre-existing conditions.