What is the Death Benefit option A in a life insurance policy?

The Death Benefit option A typically refers to the policy's stated face amount plus the cash value at the time of the insured's death. This means that if a policyholder passes away, the beneficiaries receive the total of the face value of the policy along with any accumulated cash value. This option provides both a guaranteed amount and the benefits of any savings component of the policy, ensuring that the beneficiaries are financially supported with a greater payout compared to just the face amount alone.

This understanding aligns with the nature of permanent life insurance policies, where the cash value builds over time and contributes to the overall death benefit. This option is commonly chosen by policyholders who want to ensure sufficient coverage for their beneficiaries while also allowing for growth in cash value.

In contrast, the other options present benefits that do not accurately represent Death Benefit option A. For instance, an increasing benefit based on inflation would not be fixed and would not include cash value in the payout. A fixed amount equal to the cash value would not provide the full financial protection intended in a life insurance policy. Lastly, a variable benefit that decreases over time is not just limited to life insurance policies and typically applies to different types of investments or policies designed specifically to reduce benefits.