Final answer:
A decreasing term policy comes with a death benefit that reduces over time and is paired with level premiums that remain constant throughout the term of the policy.
Step-by-step explanation:
When a decreasing term policy is purchased, it is designed with a death benefit that reduces over time, ensuring that the policyholder's coverage decreases as the likelihood of financial obligations diminishes. This kind of policy is typically used to cover specific debts that decrease over time, such as a mortgage.
Unlike some other types of life insurance policies, a decreasing term policy comes with level premiums, meaning that the premium amount does not change throughout the policy. It's essential to understand this product when considering life insurance options and how it may fit an individual's financial planning strategy.