A fixed £300,000 of cover taken out over 25 years is still £300,000 at the end. What it buys is not. At 3% average inflation, that sum has roughly half the purchasing power after 25 years; at 5% it is closer to a third. The policy pays exactly what it promised and your family is still materially worse off than you intended.

Increasing term insurance, also called index-linked cover, addresses that directly: the sum assured rises each year so the real value of the protection is broadly maintained across a long term.

Index-linked: the sum assured rises in line with a published measure of inflation, usually the Retail Prices Index. The cover tracks actual price rises, which is the closest thing to true protection of real value.

Fixed escalation: the sum assured rises by a set percentage each year, commonly 3% or 5%, regardless of what inflation actually does. More predictable, and better or worse than index-linking depending on how the next two decades turn out.

In both cases the premium rises too, typically by rather more than the sum assured, because you are older each year as well as better covered. Most insurers let you decline an increase, though declining several in a row can end the escalation permanently.

Increasing cover starts cheaper than you might expect and ends more expensive than most people plan for. A premium that looks very manageable at 35 can look quite different at 58, after twenty years of compounding increases, and that is precisely when cancelling and re-applying is least attractive because age and health have both moved against you.

The sensible approach is to look at the projected premium in year fifteen and year twenty, not just year one, and be confident it is still affordable then. Any adviser recommending increasing cover without showing you that trajectory is not giving you enough to decide on.

Increasing cover earns its extra cost over long terms, which is where inflation does its real damage: a 25 or 30 year policy protecting young children, or income replacement running to retirement. Over a ten-year term the erosion is modest and the extra premium rarely justifies itself.

It also suits people whose income is likely to rise substantially, because the protection scales with the lifestyle it is there to defend. If your circumstances are more static, or the priority is a predictable premium, level term is the more straightforward answer.