What type of life insurance policy would provide coverage for a limited period with a variable death benefit?

The option for a decreasing term policy is indeed relevant when it comes to providing coverage for a limited period with a variable death benefit. A decreasing term life insurance policy is structured such that the death benefit reduces at a predetermined rate over the policy's term, typically used to cover obligations that decrease in size over time, such as a mortgage.

In this policy type, the coverage is not static; it provides a variable death benefit, which contrasts with other types like whole life and level term policies where the death benefit remains fixed. This depletion of the death benefit ensures that the coverage aligns with the decreasing financial obligations of the insured.

Whole life insurance offers permanent coverage with a cash value component, and the death benefit remains level, while level term insurance provides a constant death benefit over the term without decreasing. Universal life policies also maintain a level death benefit option, although they allow for some flexibility in premium payments and investment of cash value, but they don’t typically feature a decreasing benefit structure. Consequently, the mechanics of a decreasing term policy make it the correct choice when considering temporary coverage with a variable death benefit.