If I take out decreasing term life insurance, does this mean that my payments will get progressively cheaper as the cover decreases?
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katrinalondon
2 years ago
Expert Financial Adviser Answer
Islay Robinson
answered 1 year ago
No, not at all. Your payments will stay the same (provided you have a guaranteed premium policy & you make all your payments etc). It is the sum assured (death benefit) which decreases according to how the policy is set up.
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Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
as Islay says, its the amount of cover that reduces and this type of policy is usually taken alongside a repayment mortgage as the debt it is protecting is also reducing.
this type of cover is certainly not appropriate for interest only mortgages as the cover reduces whilst the mortgage stays the same, leaving you with gap in cover that is gradually getting bigger!
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this type of cover is certainly not appropriate for interest only mortgages as the cover reduces whilst the mortgage stays the same, leaving you with gap in cover that is gradually getting bigger!