LifePolicyFactsMost term policies pay a fixed sum. Prices rise, so the same sum buys less later.
The effect
At 3% inflation, 500,000 today has the buying power of roughly 276,800 after 20 years. To keep todays value you would need about 903,000.
What people do
Some review cover every few years, stack a second policy as income grows, or choose a policy with an increasing option where available. Ask whether it costs extra.
Test your own case with the Inflation Impact Calculator.
Frequently asked questions
Is a 3% rate right?
It is an assumption, and real rates vary by country and period.
Does this apply to short terms?
The effect is smaller over shorter periods.
Educational content only. Not insurance, financial or legal advice.