Decreasing Term Assurance

With decreasing term assurance, the amount of cover, or the sum assured, reduces each year. Premiums are usually payable throughout the term of the policy, though in sum cases, may be limited to a period shorter than the term of the policy. This type of life insurance is usually used to cover the decreasing capital on a repayment mortgage.

The sum insured is calculated such that each year it reduces in line with the remaining capital on a repayment mortgage. At the start of a repayment mortgage, the sum insured will reduce more slowly, just like the capital on the mortgage. Decreasing term assurance is generally cheaper than level term assurance, as the sum insured reduces each year, unlike a level term policy.

Want to talk to an advisor?
Click here for a callback
Debt consolidation quote

How much can I borrow?
Click here to find out