Decreasing Term Life Insurance

A decreasing term life insurance is one in which the term can range between one and thirty years. The insurance policy is based on the premise that as a person grows older, their need for life insurance decreases because their liabilities, especially financially, decrease as their children grow up and can support themselves. So the death benefit in this policy keeps decreasing annually or in some cases monthly till such time as the amount goes down to Nil and the policy ceases to exist. The premiums that are payable stay constant throughout the term.

Some people link this type of insurance to their mortgage so that in case they were to suddenly die, their mortgage payments would be taken care of without putting a burden on their surviving family. The need for mortgage payments decreases over time as you keep paying off your loan amount so the policy suits this need so well. This is why it is sometimes called 'mortgage life insurance'. You should be careful to see that the term that you are taking the policy for and your mortgage payment schedule are in synch so your family does not have to worry at all about mortgage payments if you were to die.

What our experts will tell you is that this policy is usually taken together with life insurance and should not ideally be taken on its own. You have to realise that this policy means you have to pay out the fixed amount of premiums right through the cover period and there will be no amount paid to you when you surrender it or if you were to survive the term. However, it is a good safety net for your family if you have mortgages or loans to pay off and considering that the premiums are lower than most other insurance policies, this makes sense for some.

Types of life insurance

  • Single life insurance

    Life insurance to cover the life of one person. But what else is there to know?

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  • Joint life insurance

    A joint life insurance policy to cover two people (cohabiting, in a relationship etc).

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  • Level term life insurance

    A life insurance policy that pays out the same throughout the policy term.

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  • Decreasing term life insurance

    This cover decreases throughout the life of the policy, usually in line with a mortgage.

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  • Critical illness cover

    You don't just have to get cover for your life - consider what would happen if you were to become seriously ill.

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  • Life insurance with critical illness cover

    A combined insurance policy that pays out upon death or if you become very ill.

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  • Mortgage protection cover

    Not to be confused with mortgage PPI, this life insurance would help to pay a mortgage off.

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  • Mortgage protection cover with critical illness cover

    Similar to mortgage protection life insurance but also pays out if you develop a critical illness.

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  • Family income benefit cover

    Instead of a lump sum this would pay a fixed monthly amount to your family if you pass away.

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  • Convertible term life insurance

    A flexible type of life insurance; you can switch it to a different life insurance variation later in the term.

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  • Guaranteed life insurance

    No medical required and this type of policy is available to anyone and everyone, regardless of circumstances.

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  • Reviewable life insurance

    Every few years this policy can be "reviewed" to see if the level of cover that you have chosen is still appropriate.

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Still need to learn more about Life Insurance?

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