Adding CPI is a good idea because we know that the value of money goes down over time. Think about how much a Big Mac (a beer, a pack of smokes, a loaf of bread…) cost you 10 years ago, versus today?

Part of the thinking for the insurance providers is to make sure that your sum insured keeps pace in  ‘real terms’, that the ‘true’ value of your policy remains same over time.

However it trap for some people  who don’t realise that their cost inflation (how fast the cost goes up)      will be so high.

There is a way to mitigate this. 

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A New Zealand company