What is a key feature of decreasing term insurance?

Decreasing term insurance is specifically designed with a death benefit that diminishes over the duration of the policy. This feature is particularly useful for individuals who have financial obligations that decrease over time, such as a mortgage or other debts. As the insured's financial responsibilities lessen, the coverage amount also reduces, aligning with the policyholder's changing needs.

This type of policy typically has level premiums that remain constant throughout the policy term, which contradicts the idea of premiums being higher than those of level term policies. Additionally, decreasing term insurance covers only death, not terminal illnesses, which sets it apart from policies that might include such coverage. Therefore, the mechanism of the death benefit decreasing is the hallmark of this insurance type, making it a crucial feature for understanding how it serves its intended purpose.