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Thread: What is decreasing term life insurance?

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    Default What is decreasing term life insurance?

    I want to know what is decreasing term life insurance? I have heard this term used a few times and I do not understand. Can you please help?



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    Quote Originally Posted by gregray View Post
    I want to know what is decreasing term life insurance? I have heard this term used a few times and I do not understand. Can you please help?
    This is a type of term insurance in which the death benefit decreases on a scheduled basis.

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    Decreasing term life insurance is a variety of term insurance in which the death benefit decreases on a scheduled basis.*The decreasing term life insurance covers you for a set term and pays out a lump sum if you die during the policy term.

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    Term Life Insurance, as it denotes, is “a type of insurance with no cash value and designed for specified time such as 5, 10, 15, or 20 years.”* After the defined period of the policy, the coverage expires and the client must now choose to forego the policy, or obtain further coverage through a different one altogether. If in case the policyholder dies during the terms insured, the beneficiary then gets the amount in the policy.
    Term Life Insurance is regarded as the most inexpensive of all life insurance policies. It is actually a maximum death benefit that could be availed as low as the minimum dollar. It also provides coverage for financial responsibilities to its holder, such as debts, mortgages, or college education, depending on the need of the user. For term life insurance, no part of the consumer’s money is used for investment by the company. The term policy premium increases as the insured grows older. As with all other insurance policies, the insured has to go through a physical exam in order to be certain that they are insurable. As stated above, it has a specified time frame, but the most popular are annual, 7-year, and 10-year policies. The annual types increase slightly every year, while the 7- and 10-year plans remain the same for the period covered.

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    The death benefit decreases over time span of the policy length.

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    I consider it mortgage insurance. It is based on a mortgage term and interest and decreases with the mortgage over a designated period of years. Although it is the cheapest, I will not sell it unless a customer demands to buy it. A 30 year term is almost as cheap, but is a better policy.

    Kevin - APInsurance
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    Yeah I agree. Decreasing term life insurance got your covered for a specific term and pays out a lump sum if you die within that period. The amount of cover decreases over the term of the policy and is usually designed to tie in with the outstanding amount on your repayment mortgage. The premiums remain constant while the life cover reduces.

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    Decreasing term is almost obsolete and is rarely if ever issued today. Does anyone know of a company that offers decreasing term?

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