Which type of term insurance decreases in face value over the policy term?

Decreasing term insurance is designed specifically to provide a face value that decreases over the duration of the policy. This type of policy is often utilized to align with specific financial responsibilities, such as a mortgage, where the amount owed decreases over time. As the named insured's responsibilities or liabilities diminish, so does the payout available to beneficiaries upon the insured's passing.

The structure of decreasing term insurance is such that the premium remains level throughout the term of the policy, while the death benefit decreases usually in predetermined increments. This makes it an attractive option for individuals who want to ensure that their beneficiaries are not burdened with debts or financial obligations as they diminish over time.

In contrast, renewable term insurance allows policyholders to renew their coverage at the end of the term without undergoing a medical examination, but it does not have a decreasing benefit. Convertible term insurance provides the option to convert the term policy into a permanent policy without a medical review, again, not reflecting a decrease in coverage. Level term insurance features a static death benefit that does not change for the duration of the policy, remaining constant throughout its term. Thus, the distinctive characteristic of the decreasing nature of the face value makes decreasing term the correct answer.