Final answer:
The correct option for a young teacher with a Whole Life policy seeking increasing Death Benefit to protect against inflation would be Dividend Addition, not the Cash option, as it would allow dividends to purchase additional insurance, thus potentially increasing the Death Benefit.
Step-by-step explanation:
If a young, married teacher with two children owning a Whole Life policy wants an increasing Death Benefit to protect against inflation, selecting the Dividend Addition option would be more appropriate than the Cash option. The Cash option would provide a cash payment to the policyholder, reducing future compounding within the policy. On the other hand, the Dividend Addition option reinvests dividends to purchase additional small amounts of permanent life insurance, thus increasing the Death Benefit over time and helping to mitigate the effect of inflation.
Life insurance plays a vital role in providing financial security for the policyholder's family by guaranteeing a set amount of money, known as the death benefit, which can help cover living expenses, education costs, or any outstanding debts in the event of the policyholder's death. The accumulated cash value in a whole life policy can serve as an account for personal use, potentially easing financial concerns during retirement or other life events.