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Decreasing Term Life Insurance
Decreasing term life insurance is an excellent option for anybody who needs coverage for their loved ones. At Discount Life Cover, we understand that you require peace of mind for your family’s future, which is why a decreasing term life policy could be essential.
But how do you know if it’s suitable? And what are the features you must get to grips with before you make a purchase?
What Is Decreasing Term Life Insurance?
Similarly to fixed or level term life insurance, a decreasing term life policy only covers you for a set amount of time. However, the lump sum you receive at the end reduces over time. As a result, this type of life insurance is accessible for people who don’t want to pay for an expensive policy as they get older.
Typically, the premiums for a decreasing term life insurance policy are much lower as the payout isn’t as high.
Why Is It Worth Buying?
Usually, it’s a smart investment if you want coverage for unforeseen circumstances early in life. While you’re young, children are more dependent on your finances, and you want to ensure that they are covered should the worst-case scenario happen.
But, as you both get older, they have their own lives and money. Also, the debts you could leave behind early on are cleared or almost paid up. Therefore, there’s no need for you to pay for expensive monthly premiums, which makes decreasing term life insurance a perfect policy.
By the time you reach your golden years, the sum insured will be lower. However, your outgoings aren’t as great, so you don’t require as much coverage.
Level Term Vs. Decreasing Term Life Insurance: The Differences
Aside from the level of payout - level term pays more if you pass away at any time during the policy - there is a difference in flexibility.
Decreasing term life insurance policies are less rigid because you are in control of the terms. As a result, you can set the plan for your requirements. This makes decreasing term life insurance a fantastic option for covering a mortgage. All you need to do is create a policy that is in line with your premiums, and that reduces as you pay off your monthly fees.
Level term, however, is more suitable if you want to guarantee a lump sum payment. Because the amount payable when you die doesn’t change, you can ensure that your loved ones will have money for funeral fees and their cost of living. Just make sure the length of the term is long enough.
What Are The Benefits Of Decreasing Term Life Insurance?
Whether a decreasing term life insurance policy is right for you depends on your circumstances. This means it’s vital to understand the advantages before purchasing a policy:
- The price: while the rate of your premiums doesn’t decrease over time in line with the lump sum amount, the upfront cost is much cheaper. As a result, it’s one of the most affordable ways to cover yourself and your family in case anything happens. It’s popular with people on tight budgets as it provides coverage without the usual high premiums.
- Debt protection: arrears reduce over time, and that means a decreasing term life policy is an excellent way to protect your debts. If anything happens before they are paid, the payable amount will cover the expenses. Mortgages or hefty credit card debts are prime examples of using decreasing insurance to protect your arrears.
A decreasing life insurance policy can be much cheaper but it depends on different individual factors to make up the premium. You can check out our decreasing life insurance calculator here for a more accurate idea of costs.
When Shouldn’t You Buy One?
If you think you will survive past the term covered by your policy. As the insurance matures, the value falls to zero. Therefore, there’s no chance of a payout because the plan has no value. Also, finding life insurance once you’re in your fifties and sixties is difficult, meaning you could have to pay over the odds for coverage.
Interest-Only Mortgages
If you have an interest-only mortgage, you won’t be eligible for decreasing term life insurance coverage. The reason is down to the setup of an interest-only mortgage. At the end of the contract, you still have to pay back the full sum of the loan. That means lenders won’t accept your application as the value of the policy won’t cover the total cost.
Buy-to-let properties are standard examples of investments that come with interest-only mortgages. So, if you’re looking to invest, you should consider your life insurance options first.
Discount Life Cover
Are you searching for the most suitable life insurance coverage? At Discount Life Cover, we make it our business to simplify the process for your peace of mind.
Call us now to find out how to protect you and your loved ones for the long-term!
Compare Life & Critical Illness
If you’re searching for the best way to protect your loved ones when you die, a decreasing life insurance policy is a top contender. However, it’s vital that the option you choose is comprehensive so that your family isn’t saddled with huge debts. As a result, it’s essential to consider decreasing life insurance with critical illness cover before you make a purchase.
What Is Decreasing Life Insurance?
Decreasing life insurance is a policy where the value reduces over time. Although this might sound unappealing, it can have significant benefits. Due to its low payout amount, it’s one of the most affordable types of coverage on the market. Also, it’s suitable for people with tight budgets who want to ensure they have some coverage in case the worst happens. Why not check out our decreasing term life insurance calculator to find out how much cover you will need.
Alternatively, it’s excellent for protecting your debts early on in life. Mortgages life insurance and credit card arrears are at their most expensive when you are younger because they decrease with time. A life insurance plan where the value reduces, too, means your loved ones are protected from big debts when the rates are at their peak.
What Is Decreasing Life Insurance With Critical Illness Cover?
However, the majority of decreasing life insurance plans only payout when you die. Some include terminal illnesses that reduce life expectancy to 12 months or less, but it isn’t always guaranteed. This means that your family doesn’t get anything if you suffer from a critical illness, even though they are safeguarded should you pass away.
Investing in decreasing life Insurance with critical illness cover is the perfect way to add an extra layer of security to your safety net. Similar to all types of life insurance, it’s possible to add critical illness cover by contacting your insurer and talking through your options.
Why Is It Worth It?
Firstly, critical illness cover negates the risk of falling seriously ill. When this happens, you can expect a long layoff from work, yet your financial commitments will continue. The critical illness add-on will ensure your bills are paid for, as long as ailment is detailed on your policy.
A feature that is worth considering is that any payout is tax-free. That means you or your family won’t receive a lump sum that is lower than the amount specified because HMRC took a cut. You’ll get the money you paid for without a protected battle with the government.
How Can Discount Life Cover Help?
Tell us about your specifications and we’ll search the market to find the most suitable deal. We guarantee to beat any quote without forcing our customers to commit to our service. If you don’t want to continue with us after you fill in the 2-minute survey, there is no obligation to do so. We think you will, though, because our competitive prices are hard to beat. As an online service, we have few overheads and can give away more commission as a result.
So, if you’re looking for decreasing life insurance with critical illness cover and want a great deal, you should look no further than us! Call now to find out how we can provide you the ultimate peace of mind.
Discount Life Insurance…Why Use Us
We are an online advice service and as such have little overheads which enables us to give away more commission enabling us to me extremely competitive on price.
Having said all this, life insurance is not always about price and there are differences in the types of cover offered by providers. So we also provide an “advised sale” which means that we take on responsibility to make sure the policy you take is the right one and the most suitable for your circumstances.
