L&HNationaleasy
A 30-year decreasing term policy is sold as mortgage protection on a 30-year amortizing home loan. Across the policy's life, the:
APremium decreases each year on a set declining schedule while the death benefit stays level at the original face for the full 30-year term
Premium stays level while the death benefit decreases on a schedule designed to track the declining mortgage balance
CPremium and death benefit both increase each year, indexed upward together to keep pace with general consumer price inflation over the term
DPremium and death benefit both decrease each year proportionally and in lockstep over the entire 30-year policy term
Why this is the answer
Decreasing (or 'mortgage redemption') term insurance is structured so the death benefit declines along a schedule chosen at issue — typically tracking the principal balance of an amortizing mortgage. Premiums remain level over the term, providing payment certainty for the consumer. The product is designed to retire a specific debt: if the insured dies, the proceeds match what remains owed on the loan. Decreasing term has fallen out of favor relative to level term because consumers often realize they can buy more permanent coverage for similar cost.
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