Which term plan increases its death benefit periodically to offset inflation?

The correct approach to this question lies in understanding the features of different term life insurance policies. An increasing term plan is specifically designed to provide a death benefit that rises periodically, often aligned with inflation or a predetermined schedule. This progressive increase in the death benefit counters the eroding value of money over time, ensuring that the policyholder's beneficiaries receive a payout that maintains its purchasing power at the time of the insured's death.

The increasing nature of the benefits makes this policy particularly appealing for individuals concerned about inflation's impact on the value of their insurance coverage. As living costs and prices increase, the rising death benefit ensures that financial support for dependents remains relevant and substantial.

In contrast, other term policies lack this escalating benefit feature. Level term insurance maintains a fixed death benefit throughout the policy term, while decreasing term insurance has a death benefit that diminishes over time, which does not address inflation concerns effectively. Convertible term insurance allows a policyholder to convert their term coverage into permanent insurance but does not inherently include an increasing benefit structure.

Thus, increasing term insurance is the best choice for those looking for a policy that adapts to inflation over time.