Which of the following statements is incorrect with regards to decreasing term assurance?

The correct answer is: B. Premium amount decreases with term of coverage

Decreasing term assurance is a type of life insurance policy that provides a death benefit that decreases over time. The premium amount for a decreasing term assurance policy remains level throughout the term of the policy.

Mortgage redemption plans are an example of decreasing term assurance plans. In a mortgage redemption plan, the death benefit is used to repay the outstanding balance on a mortgage if the insured person dies during the term of the policy.

Here is a brief explanation of each option:

• Option A: Death benefit amount decreases with term of coverage. This is correct. The death benefit amount for a decreasing term assurance policy decreases over time.
• Option B: Premium amount decreases with term of coverage. This is incorrect. The premium amount for a decreasing term assurance policy remains level throughout the term of the policy.
• Option C: Premium remains leveled throughout the term. This is correct. The premium amount for a decreasing term assurance policy remains level throughout the term of the policy.
• Option D: Mortgage redemption plans are an example of decreasing term assurance plans. This is correct. In a mortgage redemption plan, the death benefit is used to repay the outstanding balance on a mortgage if the insured person dies during the term of the policy.