In a decreasing term policy, what happens to the death benefit over time?

In a decreasing term policy, the key feature is that the death benefit decreases over the life of the policy. This means that as time progresses, the amount that would be paid out upon the insured's death is reduced. Typically, this type of policy is designed to cover specific obligations that diminish over time, such as the balance of a mortgage or other loans.

While the death benefit decreases, the premiums remain level throughout the term of the policy. This structure makes decreasing term policies appealing for individuals looking to ensure that they have adequate coverage for debts that will decrease over time without the burden of rising costs in premiums.

In contrast, other policy types, such as those that provide level or increasing death benefits, do not share this characteristic and can lead to different financial planning considerations.