Which term policy has a death benefit that declines over time?

The term policy that features a death benefit that declines over time is known as Decreasing Term Insurance. This type of coverage is designed to provide a shrinking death benefit, which typically corresponds with an obligation that diminishes over time, such as a mortgage or a loan.

As the insured party pays down the mortgage or debt, the amount of the death benefit decreases accordingly. This ensures that the beneficiary receives payment that aligns with the remaining balance on the debt at the time of the insured's death. The premiums for decreasing term policies can be lower compared to level term policies, making them an attractive option for individuals who want coverage tailored to their decreasing financial obligations.

In contrast, Increasing Term policies provide a death benefit that increases over time, Level Term policies maintain the same death benefit throughout the life of the policy, and Annual Renewable Term offers yearly renewable insurance with the benefits level but does not provide for a declining death benefit.