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Normally used to cover a repayment mortgage. Decreasing term assurance, or mortgage protection life insurance, as it is commonly known, has a sum assured which reduces each year (or possibly each month) by a stated amount, decreasing to nil at the end of the term. It is normally used to cover a reducing debt, such as the capital outstanding on a house purchase mortgage.
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Normally used to cover an interest only mortgage, or alternatively for family protection. If your main concern is protecting your family or other dependants, term insurance is often the cheapest way to buy all the cover you need.
Term Assurance - pays a tax-free lump sum in the event of death during a specified period in return for a fixed monthly, or annual, premium. At the end of the term the policy finishes and there is no maturity value.
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