What distinguishes "level term" from "decreasing term" insurance?

The distinction between level term and decreasing term insurance lies primarily in the nature of the death benefit provided over the course of the policy. Level term insurance maintains a consistent death benefit throughout the life of the policy. This means that regardless of when the insured person passes away during the policy's term, the beneficiaries will receive the same predetermined amount.

On the other hand, decreasing term insurance has a death benefit that decreases over time, typically in alignment with a specific financial obligation, such as a mortgage. As the debt decreases, so does the benefit amount payable upon the insured's death. This design is often more affordable than level term insurance, but the key aspect distinguishing it is the declining value of the benefit, which contrasts sharply with the stable death benefit offered in level term insurance.

This consistency in benefit makes level term policies particularly attractive for individuals looking to ensure a specific amount of coverage is available to their beneficiaries, regardless of when death occurs within the policy term.