Decreasing Term Insurance
Term insurance whose face amount decreases over the policy period while premium remains level, commonly used to cover a mortgage balance that declines.
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In a decreasing term life insurance policy, the:
Death benefit decreases each year while the premium remains level — Decreasing term insurance keeps a level premium for the policy period but reduces the death benefit each year according to a scheduled pattern. It is often used to match a declining obligation, such as a mortgage or installment loan balance, so that the coverage tracks the amount still owed. The level premium reflects the fact that although the amount at risk falls, the policy is priced as a single package; coverage may decrease to a small final amount rather than zero at the end of the term.
National insurance concept
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