What is increasing term insurance?

• A. A term policy with decreasing death benefit.
• B. A term policy with a death benefit that increases over time, often to keep pace with rising needs or inflation.
• C. A term policy with increasing premiums.
• D. A permanent policy with increasing cash value.

Answer: (B)

Increasing term insurance is a term life policy where the death benefit grows over the term to keep up with rising financial needs or inflation. The premium typically stays level, while the payout on death increases at scheduled times, making it useful for programs like growing family expenses or higher debt protection as time goes on. It remains temporary coverage with no cash value, unlike permanent policies that accumulate cash value. The other descriptions reflect different products: a term policy with a decreasing death benefit is decreasing term; a term policy with increasing premiums isn’t the standard form of increasing term; and a permanent policy with increasing cash value is a type of permanent coverage, not term.