How Does Decreasing Term Life Insurance Work?

Advantage of Decreasing Life Insurance

One of the biggest advantages of Decreasing Mortgage Term Assurance is that the policy can be aligned with your mortgage, falling as the value of your outstanding mortgage debt falls over time.

As the benefit reduces with Decreasing Term Life Insurance, the risk to the insurer falls alongside it. Given this, premiums are cheaper than Level Life Insurance, where the payout remains constant over time and the risk to the insurer remains the same across the term of the policy.

Level Life Insurance vs Decreasing Life Insurance

In some cases, Level Life Term Insurance might be a better choice for you than Reducing Term Life Insurance. This depends on your needs.

If Reducing Term Life Assurance is aligned to fall alongside your mortgage, it won’t provide your loved ones with much of a lump sum in excess of the cash needed to repay the loan.

This could lead to a situation where although your beneficiaries have repaid the mortgage and own their home outright, they might not have sufficient cash to run the home, i.e. covering bills and maintenance etc.

Additionally, you may also want to some cash left over to cover funeral expenses, or to help cushion the blow from a sudden loss of income.

For this, a Level Term Life Assurance policy would be far better suited because the payout will remain fixed over time. So if you die halfway through the mortgage, the payout will be enough not only to cover the rest of your mortgage but also provide a lump sum with the remainder of the insured benefit.

Get Decreasing Life Insurance Quotes & Expert Advice

With Decreasing Term Life Insurance, you’ll need to ensure that the rate of decrease doesn’t exceed your mortgage interest rate. An adviser can double check this for you.

Given that many people buy their home as a couple and have joint mortgages, it may seem logical to get a joint Reducing Life Insurance policy. However, this is also worth discussing with an adviser – in many cases two single Life Insurance policies might be better suited to your circumstances.

Why Speak to Us…

We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.

• There is no fee for our service
• We are independent and impartial
  Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
• We’ve got bargaining power on our side
  This allows us to negotiate better premiums for you than you going direct yourself.
• You’ll speak to a dedicated expert from start to finish
  You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
• Benefit from our 5-star service
  We pride ourselves on providing a 5-star service, as can be seen from our 3884 and growing independent client reviews rating us at 4.92 / 5.
• Gain the protection of regulated advice
  You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
• Claims support when you need it the most
  You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.

At Drewberry we help clients with Decreasing Term Life Insurance every day, so we know the market like the back of our hands. We’re more than happy to help you with your enquiries and get you a policy in place – just drop us a line on 02084327333 for expert advice.

Tom Conner
Director at Drewberry