DECREASING TERM LIFE INSURANCE

Decreasing term life insurance is a variety of term insurance in which the death benefit decreases on a scheduled basis.

One of the features of term insurance is that, at least when compared to permanent insurance (whole-life), it is relatively inexpensive. In the early years of a decreasing term policy, the death benefit will be the face amount of the policy when purchased. Thereafter, as years pass, the death benefit will decline. Insurance of this type may be purchased when the insured has a large financial obligation to fund, such as child-rearing expenses, and needs a great deal of coverage in the early years to protect against adverse financial implications of his/her death.

The most common use for decreasing term life insurance is to cover a mortgage or other type of loan.

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