What is decreasing term life insurance in under 2 minutes


what is decreasing term life insurance with decreasing term life insurance the amount that you’re covered for also known as the sum assured decreases over time usually in line with your mortgage repayments for this reason this type of cover is
often referred to as mortgage life insurance if type of policy is designed to protect repayment mortgages only for interest only mortgages a level term policy may be more suitable because the cover amount reduces
over time decreasing term insurance is usually cheaper than level term cover like all term insurance it will only pay out if the policy holder were to die within the term of the policy how does it work you pay a monthly premium to your chosen insurer although the payout will reduce over time alongside your mortgage repayments your premium will stay the same throughout the term of your policy he pass away during your policy term your insurer will pay out a lump sum of money to your beneficiaries the amount of money paid out will depend on the amount of cover in place at the start of the policy how far into the term the policy holder dies and the rate at which the cover
decreases do I need it the Office of National Statistics has shown that someone who is 35 years old has a one in 15 chance of passing away before a mortgage is repaid whilst a forty five-year-old has a one in six chance the aim of decreasing term cover is to protect your family from having to repay the mortgage they can’t afford without you having a security can help your loved ones cope both financially and emotionally at a very stressful and difficult time despite the importance of having cover in place you’re not legally or contractually obliged to take out life insurance when you take out a mortgage

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