Life Insurance FundamentalsQuestion 123 of 315
A homeowner buys a 30-year policy where the premium stays level but the face amount declines each year along with the mortgage balance. This is best described as:
a.Annual renewable term
b.Return-of-premium term
c.Decreasing term
d.Level term
Explanation
Decreasing term holds the premium level while the face amount drops over time. It is commonly aligned with a declining mortgage balance so the death benefit pays off what is left on the loan.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)