If you're specifically looking to protect your outstanding repayment mortgage debt against death prior to paying off in full the amount outstanding, this is likely to be the right policy for you.
A decreasing term assurance policy sees the amount to be paid out (sum assured) decreasing over the term of the policy.
As the amount you need to pay on your mortgage also decreases this is the policy that is usually used to provide this kind of cover.
Remember, if you have an 'interest only mortgage' you will require a different type of life insurance cover. It is especially important if you do not have an endowment or other type of savings plan in place for paying back your mortgage loan at the end of its term.
Some mortgage providers will not release mortgage funds without the debtor securing some form of life insurance, guaranteeing repayment should the worst happen.
If you're considering this type of policy you should know:
The cost of premiums for decreasing term life insurance generally varies from person to person. The price you'll be quoted is likely to depend on your age, health and occupation.
As with all policies it's crucial you keep up the monthly premium payments to keep cover in place. These policies may also offer the option to pay an extra premium and receive a payout in the event the policyholder is diagnosed with a critical illness.
As long as the policy is used for personal rather than business use, the payout from the insurance company will be tax-free. If the policy is used for business purposes, although not certainly, there may be a tax charge on the proceeds received.
Establishing your life insurance needs -
If you're interested in researching life insurance further you should speak to an independent financial adviser. Alternatively, you can use our interactive online research tool, the Finance Navigator. Based on the answers you give to a number of targeted questions, the Life Insurance Finance Navigator will help you to establish your own life insurance needs. It will then produce a bespoke guidance report for you to read through to help you make an informed decision. It will also allow you to learn more about some of the most commonly used life insurance plans.
Once you have your report, you can then use our online quotation system to find some of the most competitively priced life insurance plans from a selection of major UK life insurance providers. Once you have found the right plan for you, use our 'apply online' facility.