What is decreasing term life insurance and how it works?
Decreasing Term life insurance is a policy where your cover amount goes down or ‘decreases’ over the policy term that you have chosen. Which in turn lowers the monthly premiums throughout the duration of the policy. This means that your premiums decrease – the price you pay doesn’t increase and will only go down as the policy progresses.
If you do not pass away before the policy ends and you want to stay covered. You will need to take out another life insurance policy, and our advisors will discuss potential solutions to assist you.
Why should I choose Decreasing Term Life Insurance?
A decreasing term policy simply provides financial cover for your mortgage in the event that you pass away before you finish paying it off. This means that your loved ones won’t be left trying to continue paying the mortgage. Instead have peace of mind that the mortgage is taken care of. At Life Insurance Cover we search the entire life insurance market to find the best possible insurance policy for you and your family.
Decreasing term policies tend to be cheaper than Level Term and are suitable for those looking to cover their mortgages. It is usually a requirement by the bank or building society providing the mortgage service that you have some form of life insurance in place before the mortgage starts. A decreasing term life insurance policy is suitable for this. Ensuring the mortgage agreement lender is settled. Meaning your family don’t have to worry about paying the mortgage themselves.
What are the benefits of Decreasing Term cover?
As the policy decreases throughout. This means that the sum assured decreases along with the monthly premiums. This means you’ll pay less and less for your life insurance cover, and it won’t increase as time goes on.
Decreasing term policies can be used by people who don’t have a mortgage. But want to still provide some financial aid for their families if they were to pass away during the policy.
Are there any considerations with a Decreasing Term policy?
A Decreasing Term policy isn’t particularly suitable for those with an interest-only repayment mortgage. Due to the capital debt being repaid when the mortgage term comes to an end.
A Level Term policy may be more suitable if you’re looking to cover more than the costs of your mortgage. Which means you could leave a lump sum for your loved ones.
Decreasing term policies do not cover you for life. If you don’t want to limit the period of time which you’re covered for. A Whole of Life policy might be worth looking into.
You can purchase a decreasing term policy for yourself or for you and a partner. known as a single or joint policy respectively. A consideration with a joint decreasing term policy is that when either of the two holders of the policy die, the other person will not be covered by the joint policy any longer. They will require a new policy to make sure they’re protected. Bearing this in mind, it may be more beneficial to set up two single decreasing term policies. Ensuring that no matter what happens, both partners are protected.
What affects the cost of a policy?
As with all life insurance policies. Your health, age and lifestyle will influence your monthly premiums and how much an insurer is willing to cover you for. Factors like smoking, height and weight, a history of illnesses and more will contribute towards how big a risk you are to an insurer.
How do I get Life Insurance?
Taking out a policy with Life Insurance Cover couldn’t be easier. Simply complete our enquiry form and our specialist advisors will be able to help you with the next steps. Offering you the protection for you and your family.