Decreasing Term Life Insurance (sometimes called mortgage protection assurance) is where the sum assured decreases over the term of the policy. It is typically purchased by people looking to protect their repayment mortgage in the event of death, although it can be used to protect the repayment of a reducing debt – such as a loan, or school fees etc.

As the outstanding mortgage balance reduces each year, so does the level of insurance. That is, the purpose of this plan is to repay any capital you owe if you died.

Will my monthly payments be the same throughout the term of the policy?

Premiums are fixed for the term of the policy, meaning they won’t increase over time.

If I decide to cancel/surrender the policy, will it have any value?

There is no surrender value at the end of a Decreasing Term Life Insurance, or if you choose to cancel the policy early. Therefore, this means that premiums are lower than a Level Term Life Insurance policy, although it is worth checking how much the cost of Level Term Life Insurance coverage would be as sometimes the premiums do not always differ widely!

Is it suitable to cover any type of mortgage?