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What is decreasing term life insurance?
Decreasing term life insurance, also known as mortgage life insurance is a type of life insurance where the payout your loved ones receive in the event of your death decreases by an agreed amount each year. Quite often, it’s bought by homeowners who want to ensure that their repayment mortgage isn’t left to their dependents when they die. It’s also taken out by people that don’t think their dependents will need such a large payout as the years pass by. For example, when your children are young and still financially dependent on you, they’ll need more money than when they’re adults and self-sufficient.
Top Rated Providers
Our comparison table is ordered by review score. The review score is the average weighted score based on product quality and user reviews from the last 12 months. Find out more about how our review score is calculated.
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1st
Review Score9.5/10Based on 4,205 reviews
Decreasing Term Quote*£6.98per monthWith Critical Illness Cover**£22.34per monthGet a Quote Read moreClaims Paid****99.5% -
2nd
Review Score9.4/10
Based on 64,956 reviews
Decreasing Term Quote*£8.25per monthWith Critical Illness Cover**£24.31per monthGet a Quote Read moreClaims Paid****99% -
3rd
Review Score9.0/10
Based on 46,762 reviews
Decreasing Term Quote*£7.47per monthWith Critical Illness Cover**£17.07per monthGet a Quote Read moreClaims Paid****98.9% -
4th
Review Score9.0/10
Based on 13,067 reviews
Decreasing Term Quote*£6.64per monthWith Critical Illness Cover**£22.10per monthGet a Quote Read moreClaims Paid****99.5% -
5th
Review Score8.4/10
Based on 29,410 reviews
Decreasing Term Quote*£9.18per monthWith Critical Illness Cover**£28.32per monthGet a Quote Read moreClaims Paid****99.5% -
6th
Review Score7.8/10
Based on 13,742 reviews
Decreasing Term Quote*£9.70per monthWith Critical Illness Cover**£26.44per monthGet a Quote Read moreClaims Paid****98% -
7th
Review Score7.8/10
Based on 12,131 reviews
Decreasing Term Quote*£8.52per monthWith Critical Illness Cover**£24.94per monthGet a Quote Read moreClaims Paid****98% -
8th
Review Score7.1/10
Based on 8,929 reviews
Decreasing Term Quote*£8.38per monthWith Critical Illness Cover**£26.17per monthGet a Quote Read moreClaims Paid****99.7% -
9th
Review Score6.8/10
Based on 1,957 reviews
Decreasing Term Quote*£7.71per monthWith Critical Illness Cover**£18.03per monthGet a Quote Read moreClaims Paid****99% -
10th
Review Score6.4/10
Based on 11,908 reviews
Decreasing Term Quote*£7.16per monthWith Critical Illness Cover**£23.51per monthGet a Quote Read moreClaims Paid****97%
*This is a decreasing term cover quote for £150,000 over 30 years, based on a 35-year-old non-smoking female. **This quote also includes £37,500 critical illness cover. ****This is the percentage of claims paid out in the last 2 years.
All decreasing term life insurance quotes are provided via Quotezone, who are FCA regulated.
Please note that some of the providers included within our table are not currently offering new policies.
In this Guide
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How does decreasing term life insurance work?
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Should I get level term or decreasing life insurance?
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What are the pros and cons of decreasing term life insurance?
How does decreasing term life insurance work?
Decreasing term life insurance is taken out for a fixed number of years that normally matches the length of the loan, for example, if you’ve calculated that it will take you 10 years to pay off your mortgage, you can take out a policy with a term of 10 years. As you reach the end of your term, the amount the insurer is willing to pay out reduces. If your policy is still in place in the event of your death, decreasing term life insurance pays out a single lump sum to your loved ones.
Should I get level term or decreasing life insurance?
Level term life insurance and decreasing life cover are the two main types of life insurance policies. The type of policy that you should take out depends entirely on your personal circumstances. With level term life insurance, you choose how long you want the cover to last and how much you want it to pay out. If you pass away during the policy term, your loved ones will receive the full amount. This option could suit you if you want to make sure your loved ones are financially secure in the event of your death.
When it comes to decreasing life assurance, the amount your loved ones will receive in the event of your death decreases over time. It usually holds the same value as a loan and you can set the term of your policy. Decreasing term insurance is sometimes called mortgage decreasing life insurance as it’s designed to decrease in line with your mortgage. This option is best suited to you if you want help make sure a large debt is paid off when you die.
What are the pros and cons of decreasing term life insurance?
Pros:
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Monthly premiums are typically lower than other life insurance policies.
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Premiums remain the same throughout the duration of the policy term.
Cons:
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Typically, you only cover yourself for the cost of your loans so there won’t be much or any money left once your loans have been paid off.
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If your benefit decreases at a faster rate than the interest rate of your mortgage, you could be left with a shortfall at claim.
- Decreasing term life insurance doesn’t work for you if you have an interest only mortgage.