Decreasing Term

This is a type of term life insurance where the amount of the death benefit decreases while the premium remains the same for the term of the contract. It is often used to provide protection for a debt the insured has incurred such as a mortgage.For example, a 10-year, $100,000 decreasing term life policy would decrease in protection at $10,000 per year as a debt is paid down. At the end of the year 10, the value of the policy is zero and the coverage expires. (See Term Insurance).

Decreasing term insurance

Type of term life insurance in which the amount of death benefit (coverage) decreases from the date the policy comes into force to the date the policy expires.
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UK: A term insurance under which the sum payable on death decreases each year by predetermined amounts. If the insured survives the whole of the policy term nothing is payable by the insurers who retain all premiums. See FAMILY INCOME BENEFITS; MORTGAGE PROTECTION.