Decreasing term life insurance offers cover for a set term; it’s often used in conjunction with a repayment mortgage.
The amount of cover decreases over the term of the policy and is usually linked to the outstanding amount owed on your repayment mortgage.
Decreasing Term Life Insurance Explained
For example as you pay off your mortgage, there is a decreasing debt outstanding, in simple terms…
Your mortgage amounts to £100,000 over a 25 year term.
Your policy is fixed at £20 per month for the whole term.
By the 24th year having paid off £95,000 of your mortgage you die, your family will receive a sum of £5,000.
Benefits And Features
Some decreasing term life insurance policies are flexible and offer further options such as critical illness cover.
If you opt for critical illness cover the policy will pay out on diagnosis of a qualifying illness or if you die during the term of the policy.
Decreasing term life insurance is also cheaper than your other main option term life insurance.
If you want to ensure there is a lump sum available for your family to pay off your mortgage if you died then decreasing term life insurance may be for you.
There is no investment element to this type of insurance if you survive the policy term there is no maturity value.
Policy premiums will depend on the cover amount, the period of cover, your age, your sex and whether you’re a smoker or not. A non-smoker is usually defined as someone who has not smoked for a minimum of twelve months.
Finding The Best Policy
Are you worried about what will happen to your family and home if you died and they lost your income?
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We’ll take the hassle out of finding the best life insurance policy and put you in touch with an expert that can explain your options and provide professional advice.
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