In a decreasing term policy which of the following decreases each year?

In traditional whole life policies, the cash value accumulates over time and does not decrease; rather, it typically grows. In a decreasing term policy, there is generally no cash value component, as it is designed purely for death benefit coverage. Therefore, this option is not applicable to the context of decreasing term insurance.

Reserves in insurance refer to funds set aside to pay future claims. In decreasing term policies, reserves are not directly linked to the face amount decreasing; instead, reserves are often maintained to ensure claims can be paid out. Thus, reserves may not necessarily decrease as the face amount does.

The premium in a decreasing term policy is typically level, meaning it remains constant throughout the policy term. While some policies might offer a decreasing premium structure, it is not a standard feature of decreasing term insurance. Therefore, this choice does not accurately describe the behavior of premiums in this context.