What is the function of an impairment rider?

An impairment rider serves the specific purpose of excluding coverage for certain pre-existing health conditions or ailments that an applicant may have at the time of securing an insurance policy. By applying an impairment rider, the insurance company protects itself from the risk associated with insuring an individual whose medical history suggests a higher likelihood of claims associated with these specific conditions.

This means that if an insured individual has a health issue that falls under the impairment rider, the insurance company will not cover costs related to that issue. This practice allows the insurer to still offer coverage to individuals who might otherwise be deemed too high-risk, while also managing their overall risk and potential financial loss. In this way, the impairment rider cultivates a sense of stability within the insurance plan for both the insurer and the insured, albeit at the cost of providing limited coverage for those specific ailments.

The other options reflect functions that do not pertain specifically to the role of an impairment rider, making them inaccurate in this context.