What Is The Decreasing Term Life Insurance?
This type of life insurance is called ‘decreasing term’ or ‘mortgage protection’ and offers decreased coverage over time, which in turn lowers the monthly premiums. The price you pay inevitably decreases as the policy advances, so your premiums remain the same.
You will need to take out another Life Insurance policy if you do not die before the Decreasing Term policy ends.
Why Should You Consider Decreasing Term Coverage?
The sum assured reduces along with the monthly premiums as the cost of the policy declines over time. Your life insurance will cost less and less as time goes on, and it won’t increase.
A Decreasing Term policy is used sometimes by those who don’t have a mortgage but would like to provide their family with at least some financial assistance should they pass away.
Are You A Candidate For Decreasing Term Cover?
Your budget and what you want to protect determine whether decreasing term cover is right for you.
A mortgage with only an interest-only component cannot be covered with this policy due to the decreasing value of the sum assured.
A fixed inheritance may not be appropriate for those who want to pay for rising funeral costs, as well as cover their mortgage.
Decreasing term policies work best for people who are attempting to cover the balance of their house repayments or plan to leave an inheritance over time that will not be as important.
If your children are older and the inheritance would not be a crucial factor in their financial security, then it would simply act as a token gift.
It is generally considered most cost-effective to purchase term life insurance as rates decrease.
When you’re on a tight budget, then it might be your best option.
How Does Decreasing Term Affect The Cost?
Life insurance policies are influenced by a number of factors, such as your health, age, and lifestyle, that determine the level of coverage available to you.
A number of factors contribute to how high of a risk an insurer sees you as, like age, smoking, height and weight, a history of illnesses, etc.
One factor that people don’t consider when applying for Life Insurance is how their occupation affects their coverage – if you work at significant heights every day, you’re more likely to be considered as ‘riskier’ than someone with an office job.
Decreasing Term Life Insurance Settlement
In the event that you pass away during the coverage period of your life insurance policy, your loved ones would receive a payout.
Term life insurance is subject to the risk of outliving the policy, thus causing your beneficiaries to lose out on any investment.
If you pass away during the policy period, the value of the payout will obviously be affected.
To receive the proceeds of your life insurance policy, your beneficiaries need only make a claim.
Our customer service team will be happy to assist you through the claims process if you have purchased your policy through Reassured.
Is There A Difference Between Declining Life Insurance And Level Term Insurance?
- There is a major difference between a level term and a decreasing term relating to the sum assured.
- In contrast with decreasing term life insurance, the value of level term life insurance remains the same throughout the policy.
- Your loved ones will receive a fixed amount regardless of when you pass away during the policy.
- For the same sum assured, level term coverage is generally more expensive than decreasing term because it provides an increased level of protection.
- Term insurance that decreases in value as you pay down your mortgage is ideal for those who are paying down a mortgage by instalments.
- On the other hand, level term life insurance is more applicable to aspects that do not change with the passage of time.
Where Can You find Decreasing Term Life Insurance?
With Vidaguard, you can easily purchase a Decreasing Term policy. You can find a variety of Decreasing Term policy options by using our online quoting tool. We provide life insurance quotes based on perfect health and lifestyle. They may not reflect your actual insurance costs.
We can also be reached directly at [email protected] or Contact Us . Although we are not advisory services, we can answer your questions with facts, not our opinions.
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