What is a key feature of decreasing term insurance?

Decreasing term insurance is characterized by a death benefit that declines over the term of the policy while the premium payments remain constant. This type of insurance is often used to cover financial obligations that decrease over time, such as a mortgage or other loans, where the amount owed diminishes as payments are made. The idea is that as the insured individual's debts decrease, so does the need for the same level of life insurance coverage, making it a practical choice for many policyholders.

The constant premium aspect is essential because it allows policyholders to budget effectively without the worry of fluctuating costs. Over time, policyholders benefit from knowing that as their financial needs change, the terms of their insurance align accordingly. This structure distinguishes decreasing term insurance from other types, such as level term or increasing term insurance, which have different dynamics regarding their benefits and premiums.