What type of Whole Life Insurance policy specifically increases according to inflation?

Indexed Whole Life insurance is designed to provide a death benefit while also accumulating cash value that adjusts based on a selected stock market index. This type of policy incorporates a mechanism to align the cash value growth with inflation, using a market index as a benchmark. The cash value increases may not be directly tied to the stock index’s performance, but rather, they are influenced by the index's movement in a way that aims to protect against inflation over time.

This dynamic helps ensure that the policy's value can grow at a rate that keeps pace with rising costs in the economy, making it a popular choice for those concerned about the eroding effects of inflation on their savings and benefits over the long term.

In contrast, Ordinary Whole Life, Limited-Payment Life, and Variable Life insurance policies do not specifically incorporate inflation adjustments in the same manner. Ordinary Whole Life typically offers a level premium and guaranteed cash value growth, but it does not adjust for inflation. Limited-Payment Life provides coverage for a set time but still maintains traditional fixed returns. Variable Life allows policyholders to invest the cash value in various accounts for potentially higher returns, but it does not guarantee inflation protection linked to a specific index.