Life
insurance

Types of Life Insurance Cover

Decreasing Term Life Insurance could be right for you.

Decreasing term insurance provides life insurance cover that decreases over a set number of years. This is useful for people with a mortgage or other loan that decreases over time, as the amount of cover needed is less as time goes on.
The payout could help pay off your repayment mortgage or loan if you should die during the term of the plan. There is no cash-in value at any time.
The monthly premiums you pay remain the same throughout the policy, but are set to take into account the reducing amount of cover, so they are often cheaper than with other types of life insurance.
This type of cover pays out if you are diagnosed with a terminal illness (terminal illness benefit does not apply in the last 18 months of the policy, and life expectancy must be less than 12 months). If terminal illness benefit is paid out, the plan will come to an end and there will be no further payment in the event of death.

You don't pay for more cover than you really need. If you die within the term of the policy, it will pay out a lump sum, usually free of personal liability to income tax and capital gains tax to help clear whatever is left outstanding on your repayment mortgage or loan at that point. The law relating to tax may be subject to change in the future.
Monthly payments stay the same throughout the policy and, because of the reducing level of cover, they are often cheaper than with other types of life insurance.
You can set the cover to run alongside your loan or mortgage, or even finish earlier than your loan if you don't want to protect a small amount of the debt.
If you move your loan or mortgage during the period of cover, you can usually use the same policy with the new loan.

If you have a repayment mortgage then this product may be a good option for you, as the amount of cover will reduce broadly in line with the amount you owe on your mortgage.
Your family or friends will be able to use the money to help pay off the mortgage if you die during the policy term, which means that the house may not have to be sold or reclaimed by the mortgage lender.