K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she select?

Choosing the Paid-Up Additional Insurance option as a dividend option would be the best choice for K if she desires an increasing death benefit to mitigate the effects of inflation. This option allows policyholders to use dividends to purchase additional coverage. The additional insurance that K acquires is 'paid-up,' meaning she won't have to worry about additional premiums for that extra coverage.

This extra coverage increases the total death benefit without increasing ongoing costs, which effectively helps combat inflation by ensuring the death benefit grows over time, keeping pace with the rising cost of living. As K accumulates more paid-up additional insurance through dividends, her overall policy value increases, thereby enhancing her financial protection for her beneficiaries.

Overall, this dividend option serves both as an investment in her insurance and as a practical strategy for inflation protection, making it especially suitable for someone who is concerned about the future purchasing power of the death benefit.