How does the Cost of Living Rider help policyholders?

The Cost of Living Rider is designed to protect policyholders from the erosion of their life insurance coverage due to inflation. This rider allows for automatic increases in the policy's face amount based on a specific inflation rate, usually aligned with the Consumer Price Index. The critical advantage of this rider is that it increases coverage without requiring the policyholder to prove insurability again, which is beneficial as it eliminates potential health underwriting that might otherwise hinder access to increased coverage.

By integrating this rider, policyholders can ensure that the death benefit will remain relevant and effective over time, matching the rising cost of living. This feature is particularly advantageous in times of high inflation, as it helps maintain the purchasing power of the life insurance proceeds for the beneficiaries.

In contrast, the other options focus on different aspects that are not aligned with the primary function of the Cost of Living Rider.