A cost-of-living (COLA) rider on a life insurance policy is designed to:

Explanation

A cost-of-living rider automatically increases the policy's death benefit at intervals, typically tied to an inflation index, so the coverage keeps pace with rising prices, and these increases usually require no additional evidence of insurability. It does not reduce premiums (increased coverage generally costs more), does not refund premiums, and is unrelated to paying dividends. The rider protects the real value of the death benefit against inflation over time.