What type of life insurance policy provides coverage for a limited time with a changing death benefit?

The correct answer is a decreasing term policy. This type of life insurance is specifically designed to provide coverage for a specified, limited period, during which the death benefit decreases over time. It is typically used to cover a financial obligation that may diminish over time, such as a mortgage.

For instance, if an individual takes out a loan, a decreasing term policy can be structured to match the declining balance of that loan. As the principal amount owed decreases, so does the death benefit provided by the policy. This means that while the coverage is limited to a certain timeframe, it aligns with the decreasing risk associated with the obligation being insured.

In contrast, other types of policies such as whole life and universal life offer permanent coverage with varying features, including cash value accumulation, but they do not feature a decreasing death benefit over time. Level term policies maintain a constant death benefit throughout the coverage period, differing fundamentally from the structure of a decreasing term policy.