Which death benefit option increases each year by the amount that cash value increases?

The Increasing Death Benefit option is designed to provide a death benefit that rises annually in accordance with the growth of the policy's cash value. This ensures that as the cash value accumulates, the death benefit also increases, providing greater financial protection to the beneficiaries over time.

This option is especially beneficial for policyholders who want to ensure that their beneficiaries receive a more substantial benefit as time passes and the cash value of the policy grows, reflecting the investment component of the policy. By linking the death benefit to the cash value growth, the policy also emphasizes the dual nature of life insurance as both a protective and accumulation vehicle.

Contrastingly, the Level Death Benefit option maintains a consistent death benefit throughout the life of the policy, regardless of the cash value fluctuations, while the Decreasing Death Benefit option sees a reduction in the death benefit over time, typically designed to align with specific financial obligations like a mortgage. Thus, the Increasing Death Benefit option stands out as the correct answer for this question, as it directly ties the increase in cash value to the growth of the death benefit.