How does the Cost of Living Rider affect the death benefit amount?

The Cost of Living Rider is designed to ensure that the death benefit of a life insurance policy keeps pace with inflation. Over time, the purchasing power of money can diminish due to inflation, which means that a fixed death benefit might not provide the same level of financial support to beneficiaries in the future as it would at the time the policy was issued. By increasing the death benefit in alignment with inflation, this rider helps to safeguard the financial security intended by the policyholder, ensuring that the beneficiaries receive an amount that reflects the rising costs of living at the time of the insured’s death. This mechanism helps to maintain the value of the death benefit, making it a valuable addition to a life insurance policy, especially for those concerned about long-term economic changes.