What generally happens to the face amount of a decreasing term life insurance policy over the policy period?

In a decreasing term life insurance policy, the face amount is specifically designed to decrease over time. This type of policy is often used to cover obligations that diminish over the policy's term, such as a mortgage or other loan, where the financial obligation reduces as payments are made. As the insured individual fulfills their payment obligations, the face amount of the policy corresponds with this decrease, ultimately reaching zero by the end of the term.

The decreasing nature of the coverage allows for lower premiums compared to level term policies, making it a financially viable option for those looking to secure only the amount of coverage needed to offset specific, depleting liabilities. Thus, the correct understanding of how a decreasing term life insurance policy operates is that its face amount decreases to zero over the policy's duration.