What is a significant feature of a rider indicating cost of living adjustments in an insurance policy?

A rider that provides cost of living adjustments is specifically designed to ensure that the benefits of an insurance policy keep pace with inflation. This feature is critical because as inflation occurs, the purchasing power of money decreases, which can affect the adequacy of benefits over time. By incorporating a cost of living adjustment rider, an insurer can periodically increase the death benefit, disability benefits, or other advantages provided by the policy, thereby ensuring that they maintain their value for the policyholder in the future.

This contrasts with the other options. While cash value accumulation is an important aspect of certain life insurance policies, it is not directly related to cost of living adjustments. Periodic reviews of policy terms might be useful for other reasons but do not address inflation specifically. A one-time cash benefit upon death pertains to the payout structure of life insurance, but again, this does not consider adjustments for rising costs over time. Therefore, the cost of living adjustment rider is vital for keeping insurance benefits aligned with the economic reality faced by policyholders.