What is the main characteristic of decreasing term insurance?

Decreasing term insurance is designed such that the death benefit, or face value, declines over the term of the policy. This characteristic is often aligned with the decreasing financial obligations of the insured, such as a mortgage or other debts that diminish over time. While the face value decreases, the premium payments remain constant throughout the duration of the policy. This arrangement can be particularly beneficial for policyholders who want coverage that aligns with specific financial responsibilities that are expected to decrease.

In contrast, other types of insurance policies may either feature a level or increasing death benefit or have varying premium structures. Policies that offer an increasing face value would not meet the characteristic of decreasing term insurance. Additionally, premiums decreasing over time is not a typical feature of decreasing term; instead, they are designed to remain level. Policies lasting for a lifetime refer to permanent life insurance products, which fundamentally differ from the term structure of decreasing term insurance.