When might a term insurance need decrease over time?

A term insurance need may decrease over time when the insured is reaching financial goals because as individuals achieve their financial objectives, such as paying off a mortgage, funding children's education, or accumulating savings, their reliance on life insurance for protection against financial loss diminishes.

For instance, if an individual has a term policy in place primarily to secure their family's financial future while they are working and raising children, once those children are financially independent or debts are settled, the financial threat posed by the loss of the insured decreases. With diminished responsibilities and financial obligations, the need for the same level of life insurance can reduce.

This understanding is key for insurance planning, as it allows for adjustments in coverage to align with current needs and circumstances rather than maintaining unnecessary coverage once the financial objectives have been met.