What’s the difference between decreasing and level term life insurance?
• Level-term life insurance provides you with a fixed amount of cover at all times while the policy’s in place. This type of policy might be suitable to pay off the outstanding capital on an interest only mortgage.
• With a decreasing term life insurance policy, the potential pay-out becomes lower (decreases) over time. This type of life insurance is mainly used to pay off any outstanding mortgage capital the idea being that this also decreases over time as you pay off the capital. Because the amount potentially paid out decreases over time it is also usually cheaper than level term, but remember you should choose the policy that’s right for you –it isn’t all about the price.