Which type of policy allows adding a life insurance rider to a disability income policy?

The correct answer relates to the ability of riders to be attached to disability income policies. A disability income policy can indeed have a life insurance rider added to it, enhancing the coverage provided to the insured.

Among the choices, annual renewable term policies are particularly relevant because they are designed to provide coverage for a specified term without requiring proof of insurability at renewal. This flexibility allows policyholders to easily add riders, such as a life insurance rider, which can ensure that if the insured becomes disabled, their loved ones also have some level of life insurance coverage in place without the usual hurdles of underwriting.

In contrast, whole life, term life, and universal life insurance policies are structured differently. Whole life is permanent insurance that builds cash value. Term life is focused on providing coverage for a specific term without cash value accumulation. Universal life offers flexible premium payments and potential cash value but is more complex in its structure and purpose. These policies are typically not structured in a way that complements a disability income policy with the addition of a rider as seamlessly as annual renewable term. Thus, within the context of adding a rider specifically to a disability income policy, the characteristics of annual renewable term make it the ideal choice.