Decreasing Term Life Insurance

When you take out a Decreasing Term Life Insurance policy, the premium (the amount that you pay each month towards the policy) is calculated on the basis that the final payout would pay off your outstanding debts in the event of your death. Decreasing Term Life Insurance is often known as Mortgage Insurance, because it is a type of cover that decreases as you continue to pay off large debts such as your mortgage loan. Other reasons why people take out Decreasing Term Life Insurance are in order to receive a payout that would take care of remaining years of school or university fees or pay off a personal loan or hire purchase debt, if they were to die unexpectedly during the policy term.

Because the amount of cover actually decreases over time, the overall cost of the policy is cheaper than say, a Whole of Life or Level Term Insurance policy. However, the premium costs will have been calculated so that the monthly or yearly premium that you would pay would remain constant throughout the length of the policy term. However, as with other forms of Term Insurance, you are only covered for the length of time that you agree with your insurer at the start of the policy. The risk is that if you should die outside the term specified, you would not receive a payout at all. There are a number of options that can be added on to a Decreasing Term Life Insurance policy, such as Critical Illness or Terminal Illness cover. If you would like to talk through your options with an experienced adviser and receive a no-obligation quote, please complete the short form on the next page.

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Important Tips for Buying Life Insurance

• Life 'Insurance' is different from Life 'Assurance' because it is not a certainty.  You would insure yourself against something unexpected happening, but would take out Assurance to minimise your financial exposure to something inevitable.

• If you take out any type of 'Term' insurance product, this means that you are choosing a set period of time when your cover will be active.  Beyond this period, your cover is no longer valid.

• The policy will be cheaper the less 'risky' you are to an insurer.  If you smoke, are in poor health or enjoy high-risk sports, statistically you are more likely to die, and therefore the cost of your premium will be higher.

• Joint policies for couples should be approached with a certain amount of caution.  The average joint policy pays out only after the first person dies, but for a relatively small amount more you could get separate policies with two payouts, which would have a greater benefit for your family (especially when you consider the expense of inheritance tax).