What is the primary purpose of decreasing term life insurance?

Decreasing term life insurance is specifically designed to provide coverage that decreases over time, which aligns closely with the needs related to a mortgage or similar financial obligations. As outstanding debts, such as a mortgage, diminish through regular payments, the policy's death benefit similarly decreases, ensuring that if the insured passes away, the remaining balance on the mortgage can be paid off. This helps protect the insured's beneficiaries from financial burden and ensures that they won’t lose their home.

This type of insurance is particularly advantageous for those who want to ensure that their mortgage is covered without the need for a larger, more expensive permanent life insurance policy that would not be financially necessary as debts are paid down. The structured decrease in coverage over time matches the decline in mortgage debt, making it a cost-effective solution for many homeowners.

The other choices do not capture the primary function of decreasing term life insurance. While it does provide death benefits, that is a general feature of all life insurance and not its primary purpose. It is not primarily aimed at funding an estate, nor does it provide permanent life insurance coverage, which involves different policy structures and purposes.