Allowing for future increases - inflation linked life insurance

Both lump-sum and family income benefit policies can pay out a ‘level’ (i.e. fixed) amount: the amount you are insured for stays the same over the term of the policy which means that its real value is likely to go down because of inflation.
Alternatively, if you want to guard against inflation eating away at the amount you are insured for, you can choose an ‘escalating’ policy where the amount you are insured for and your premiums increase each year – either by a fixed percentage, or in line with the Retail Prices Index (RPI).

Escalating policies cost more than policies which pay a level benefit, but they are a good way of making sure that the value of your cover is maintained – a particularly important factor if you are insuring for more than ten years, say.