Decreasing Term Assurance

A decreasing term policy is usually taken out to help clear a specific debt such as a mortgage. Similar to the way a repayment mortgage decreases – this type of policy reduces the amount of cover it provides over time, as the debt decreases.

In the event that the policy holder passes away, a decreasing term assurance pays beneficiaries a lump sum that can be used to repay the mortgage.

One of the cheapest forms of life insurance, this type of cover can provide peace of mind for policy holders and their loved ones, knowing that the home is financially secure should the worst happen.

How does Decreasing Term Assurance work?

Often referred to as mortgage insurance – decreasing term life insurance refers to the way in which the pay-out amount decreases each year, with it falling to zero by the end of the term. The cover amount reduces over time to match the decreasing mortgage liability and providing the interest rate is equal to the mortgage rate – the cover will reduce in line with the debt.

This type of policy is usually taken out to protect a principle repayment mortgage and to help pay off that mortgage in the event that the policy holder passes within the policy term.

Is Decreasing Term Assurance right for me?

For those buying a property via means of a mortgage, decreasing term life insurance can help cover the repayment mortgage, providing peace of mind that the family home is protected should the unthinkable happen.

Whilst the amount paid out by decreasing cover reduces over time the monthly payments are fixed and can offer a good alternative to the more costly level cover for those on a tight budget.

Find out more about Decreasing Term Assurance

For more information on decreasing term assurance and to find out if it could be right for you, give Opul Life a call today on – 01245 408 602 and speak to one of our experts.

Our team of friendly, professional advisors are here to help offer impartial advice and explain all of the information in a way that is simple and easy to understand.