What is a key feature of a decreasing term life insurance policy?

A key feature of a decreasing term life insurance policy is that the death benefit decreases each year. This type of policy is typically designed to provide a temporary death benefit that aligns with a specific financial obligation, such as a mortgage or a loan. As time progresses, the amount of coverage reduces, usually at a predetermined rate, which reflects the diminishing risk associated with the obligation being insured.

This feature is particularly useful for individuals who anticipate a decreasing financial need over time. For instance, as a mortgage balance decreases with each payment, a decreasing term policy can offer coverage that aligns with the remaining balance, ensuring that beneficiaries receive a death benefit that corresponds with the debt they would need to pay off.

In contrast to this, increasing premiums, flexible premiums, or a constant coverage amount are characteristics associated with other types of life insurance policies. Thus, the decreasing benefit aligns perfectly with the intended purpose of the policy, making it the correct answer.