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What is decreasing term life insurance?


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2011-09-13 15:25:18
2011-09-13 15:25:18

Decreasing term life insurance is a variety of term insurance in which the death benefit decreases on a scheduled basis.

One of the features of term insurance is that, at least when compared to permanent insurance (whole-life), it is relatively inexpensive. In the early years of a decreasing term policy, the death benefit will be the face amount of the policy when purchased. Thereafter, as years pass, the death benefit will decline. Insurance of this type may be purchased when the insured has a large financial obligation to fund, such as child-rearing expenses, and needs a great deal of coverage in the early years to protect against adverse financial implications of his/her death.

The most common use for decreasing term life insurance is to cover a mortgage or other type of loan.

it mean going up or Dow one of those


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Decreasing term life insurance does not usually have any cash value. Decreasing term life insurance is life insurance coverage in which the face amount of a term life insurance policy declines by a certain specified amount over a specific number of years. For example, the initial face amount of coverage of a $200,000 decreasing term life insurance policy decreases by $20,000 each year, until after 10 years the face value of the policy equals zero. The premium does not decrease over the term of the policy.

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A decreasing term life insurance policy is one that offers a steadily declinintg life insurance benefit as the years go by. This kind of policy is often called "mortgage protection" term life insurance and is often bought for a length of time that matches one's mortgage period.

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The type of life insurance that is more than often used as mortgage insurance is known as decreasing term.

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Credit life insurance, Mortgage insurance, or decreasing term insurance.

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