It depends on the type of term policy you purchase. The most common are guaranteed level term life which has a steady face amount and premium for a specific period of time, such as 10-20-30 years. Decreasing term is more commonly known as mortgage life or credit life. These policies insure a specific debt which is being repaid. Therefore the longer one lives and repays the debt the lower the face amount of the term life policy. There are certainly other applications to decreasing term life insurance.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Most people who buy term life insurance are buying level term coverage, meaning the premiums and death benefit remain fixed and guaranteed for a specified number of years (e.g. 10, 15, 20, 25, or 30 years). Once the initial period of premium guarantee expires, the premiums would change to annual renewable term insurance and increase each year (based on age).
Policies with fixed premiums and a decreasing face amount over a specified time period are usually a form of mortgage life insurance. These types of policies are usually offered by banks and credit companies, however, the rates are generally about the same as a traditional level term life insurance policy so you're not really going to get an added benefit to the mortgage policy.. For that reason, I would recommend locking in a level term policy over a mortgage life policy.
I hope the information is helpful - please feel free to contact me for assistance with your coverage, including quotes and poilcy comparisons, and if you have any other questions. Thanks very much.
Term Life Insurance does not usually decrease in value. There are some products that will reduce the face amount at the END of the term. But the face amount stays level during the years of the term. It is very difficult to find traditional "decreasing term" policies from life insurance companies, where the face amount decreases every year.
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Policies with fixed premiums and a decreasing face amount over a specified time period are usually a form of mortgage life insurance. These types of policies are usually offered by banks and credit companies, however, the rates are generally about the same as a traditional level term life insurance policy so you're not really going to get an added benefit to the mortgage policy.. For that reason, I would recommend locking in a level term policy over a mortgage life policy.
I hope the information is helpful - please feel free to contact me for assistance with your coverage, including quotes and poilcy comparisons, and if you have any other questions. Thanks very much.