Decreasing Term Insurance

What is decreasing term insurance? Term insurance is one of the most affordable life insurance policies. It has two types; decreasing and regular. In this blog post, we will be talking about the decreasing term insurance. In addition, decreasing term insurance helps to provide temporary coverage for certain financial needs such as outstanding mortgages or debt.

Decreasing Term Insurance
Decreasing Term Insurance

This policy allows the death benefit and coverage to decrease over time with the belief that your dependents will need less help in the future. It is very useful if there are outstanding financial issues that will need to be taken care of.

Additionally, decreasing term insurance can help to cover liabilities temporarily while costing less than the level term life insurance. Generally, we can say that, it’s made to match your decreasing financial responsibilities. So, if you pass away, this insurance is there to protect your beneficiaries from the specific debts that are still around.

How does decreasing term life insurance work

It is a temporary type of life insurance and it is commonly referred to as mortgage or DTA insurance. Where you purchase this policy matters. If you purchase it from your insurer directly, you will get to choose your beneficiary. However, if you purchase it as part of a loan, the bank will be the beneficiary. 

With this policy, your death benefit will continue to decrease over time. Moreover, the rate at which it will decrease and your benefit payout will depend on the insurance terms. And the type of coverage you wish to buy.

When can I Consider Buying a Decreasing Term Life Insurance Plan

This policy is a very good option if you want to purchase to help cover your liabilities. If you have taken a mortgage or car loan or you have liability in your business. Moreover, this plan will help to make sure that your family does not have to worry about your debt when you pass away. As you repay your loan, the money assured will also reduce.

Pros and Cons

Let’s talk about the benefits and drawbacks of decreasing term insurance. Check them out below;


  • You may not need to take a medical exam. Only a short questionnaire may be required
  • It is very affordable. You can compare different quotes to get the best prices
  • A policy with a death benefit that matches your loan balance can ensure that you are paying premiums for the coverage you need.


  • You won’t be able to convert to permanent life insurance
  • If you fail to estimate the needs correctly, you may expose your family to financial hardship.
  • This policy is not common, so you may have very few options when comparing the quotes.
  • Death benefits come in the future, so your beneficiary will get less amount if you pass away towards the end of the contract term.

Check out the advantages and disadvantages of this life insurance policy to know if it is really for you or not.

Decreasing term life insurance cost

This policy is always cheaper than the level-term life insurance because the benefit of death decreases every year. With each of the decreases, the insurer has a very low risk and death benefit payout if you pass away.  However, you should know that the premium is the same throughout the life of the policy. This means that the amount you will be paying will be the same for less coverage towards the end of the policy.

The cost of the term life insurance policy varies based on different factors such as; your age, health, lifestyle, the term length, occupation, and the amount of coverage you go for. Getting different quotes for this insurance is the best way to compare the same coverage to find the best rate. You should be able to find the right coverage with fewer amounts by shopping around.


Decreasing Term Insurance isn’t just a shield; it’s your financial help. As you conquer mortgage and debts, this policy suit transforms. It ensures that you’re always dressed for success in the future. It’s not just about having an oversized shield; it’s about having the perfect fit for every page of your financial life. Purchase today from the insurance provider online or physically.


How Do I Buy Decreasing-Term Life Insurance

You can purchase the decreasing term life insurance directly from an insurer, online, through a broker or an agent. However, you should know that not every insurer provides this type of coverage.

Can I Get a Decreasing Whole Life Insurance

No, you can’t. The whole life insurance is a permanent policy that has fixed premiums. And it lasts for as long as you pay the premiums.

Who Should Consider a Decreasing-Term Life Insurance

Personal, auto, business, and mortgage loans are the types of debt obligations that this policy can cover. Parents who have dependents may also benefit from it. Because it can provide benefits early to offset outstanding tuition or financial expenses. As the children grow, the need to receive financial protection may decrease.