insurance

10 questions for your life insurance agent

Will the death benefit adjust for inflation?
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Will the death benefit adjust for inflation?

"If we're talking about (a death benefit) that's anywhere from 20 to 80 years away, we need to talk about having that death benefit increased (over time)," says Butler.

A $500,000 death benefit may seem enormous today, but 30 years down the road, it will only be worth approximately $200,500 after adjusting for inflation. With inflation increasing approximately 3 percent each year, time alone can severely erode your life insurance policy even if you never miss a payment. While some policies automatically adjust to keep pace with inflation, some companies sell that feature as an additional rider. Before signing onto a policy, Butler advises shoppers to ask their life insurance agent if the policy automatically factors in inflation and allows them to buy more insurance later on if necessary.


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