In short
Indexation is an option that increases your cover, and usually your premium, each year to help protect its value against inflation.
Indexation, also called index-linking, automatically increases your sum assured or benefit each year, often in line with a measure of inflation or by a fixed percentage. The aim is to stop the real value of your cover being eroded over a long policy term.
When the cover rises, the premium normally rises too. On most policies you can decline an individual increase if you prefer to keep the premium steady, though repeatedly declining may affect future increases depending on the insurer's rules.
Indexation can be valuable for long-term protection, where prices and living costs may change considerably over the years. It is worth weighing the benefit of keeping cover in step with inflation against the gradually rising premium it brings.
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