Decreasing Term Insurance

A type of term life insurance whereas the face amount (death benefit) decreases over time (generally monthly or annually or in scheduled steps) throughout the life of the policy while the premiums stay level.

A decreasing term policy can be useful when the owner or insured anticipates needing successively less coverage throughout the life of the policy.  An example may include purchasing insurance to cover a mortgage where the amount of principle on the home is steadily decreasing and leads to less and less coverage desired as time elapses.

Premiums with a decreasing term policy stay level and are cheaper than either a level term policy or increasing term policy where, respectively, the face amount stays the same or increases over time.

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