Final answer:
In an increasing term policy, the death benefit is the component that must increase. This type of policy is distinct from cash-value life insurance, where cash value can accumulate but is not linked to the concept of an increasing term. Thus, the option "A" is the correct answer.
Step-by-step explanation:
If James has an increasing term policy, the component of the policy that must increase is the death benefit. An increasing term policy is typically a term life insurance policy with a death benefit that grows over the policy term. The other components such as premiums, cash value, or policy term are not necessarily required to increase with an increasing term policy.
Cash-value (whole) life insurance is a different product from term insurance, where a policy accumulates a cash value over time, and this can serve as an account for the policyholder's use. Nevertheless, the cash value is not the component that increases in an increasing term policy; it's the death benefit.