What is Decreasing Term Life?
Decreasing term life refers to a form of term life insurance. It is unlike level term insurance, which guarantees a set payout if you die or if you are diagnosed with a critical illness or disability as defined by the policy. Instead, the amount of payout decreases, often on a yearly basis, though your premiums stay the same. There are some reasons why decreasing term life may be a good idea. First, it’s less expensive than level term life, so it can be good protection for people who don’t have a lot of money to pay for life insurance. Second, if your main goal is to insure that your mortgage is paid should you pass away, decreasing term life is usually attached in terms of payout to the amount of your mortgage. If this form of insurance is meant to only cover your full mortgage, that amount should naturally decrease as you make monthly payments. It may be used as a form of mortgage insurance, especially since many plans include payout if you become critically ill or seriously disabled
