What Is Decreasing Term Life Insurance?

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Decreasing term life insurance is a type of term life insurance policy that provides coverage for a specific period. The death benefit amount decreases over time, usually on a monthly or yearly basis.


Policy Death Benefit Percentage Decrease Payout After 10 years
$300,000, 30-year policy $300,000 3.33% $210,000

This type of policy is more affordable than other types of life insurance policies, particularly permanent policies such as whole life and universal life. Decreasing term life insurance is ideal for individuals who have specific expenses or debts that will decrease over time, such as a mortgage, student loan, or business loan.

Decreasing term life insurance isn’t available through all insurers. If you’re interested in this type of policy, you may need to shop around for life insurance to see who offers it.

Before purchasing a policy, consider the specific needs of your loved ones. If they won’t depend on your income long-term, decreasing term life insurance may be the right choice. However, if they will need the original death benefit amount even if you pass away at an older age, other types of life insurance may make more sense.

Use a life insurance calculator to determine the right coverage amount for your loved ones.

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