Does Term Life Insurance Decrease Over Time?

Most term life insurance companies have guaranteed level death benefits and premiums for a specified number of years.

For example, a term of 10, 15, 20, 25 or 30 years is common among term life insurance plans. These plans are called Level Term Life Insurance policies.

For instance, if you bought a 20 year level term policy for $300 a year with coverage of $200,000 – then you would pay $300 each year for your life insurance and the amount of life insurance would remain the same ($200,000) each year for the entire 20 year term.

There are some life insurance carriers that issue reducing term plans (often purchased to cover a mortgage) although they are not as popular as they were 15 or 20 years ago. These plans are referred to as decreasing term life insurance where you pay the same premiums each year, but the amount of life insurance protection decreases each year throughout the duration of your term life insurance policy.