Decreasing Term Life Insurance Policy

What is Decreasing Term Life Insurance?

Decreasing Term Life Insurance (sometimes called Mortgage Life Insurance) is a type of life insurance where the payout your loved ones receive in the event of your death goes down over time.

Decreasing Term Insurance is taken out for a fixed number of years and is usually intended to cover a specific debt, such as a repayment mortgage. Because it reduces over time, it can be cheaper than Level Term insurance.

Decreasing Term Life Insurance

With Level Term your family could:

  • Maintain their living standards
  • Clear any debts
  • Pay-off any mortgage

With Decreasing Term you could:

  • Protect your loved ones from a reducing debt, such as a mortgage
  • Get a cheaper premium than with Level Term (for the same initial cover amount)
  • Still get a fixed premium over your policy term

Mortgage Life Insurance: How does it work?

As a Decreasing Term policy is often taken out to cover a repayment mortgage, it doesn’t usually decrease by the same amount each month. This is to match the way the remaining balance of your mortgage gradually reduces. The cover therefore decreases slowly over time, so the lump sum should pay off the balance of your mortgage if you died.

This is because when making mortgage repayments, the amount you pay off the balance is very slow to begin with, as most of your repayments go on the interest.

As you pay off more of the mortgage, the remaining balance reduces more quickly. Decreasing Term Life Insurance Infographic

Our Decreasing Term Life Insurance decreases in the same way to make sure your cover doesn’t reduce quicker than your mortgage balance.

Depending on the amount of cover you choose, this means your loved ones should be able to pay off the remaining balance if you died within the policy term.

At Beagle Street, our Decreasing Term Life Insurance decreases in line with a mortgage with an interest rate of 6%, regardless of what your mortgage interest rate is. If your mortgage interest rate is less than 6% then our Decreasing Life Insurance could clear the outstanding debt.

Your Beagle Street policy is not directly linked to your mortgage, as the payout could be used by your loved ones to cover any expenses, debt or living costs if you died.

Benefits of Beagle Street*

Just some of the benefits included with Life Insurance from Beagle Street:

*Terms and Conditions may apply

Trust Tool
FREE tool to place your policy in Trust.

Terminal Illness Cover
Terminal Illness cover included as standard.

Accidental Death Benefit
If you don’t get an immediate decision on your policy.

Online Account
Online access to your account, so your policy documents are never lost.

Search Official Records
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“Fast and easy without the jargon. Excellent value and exactly the cover I need for my family.”

Lynn Thorpe, 8th October 2018

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Decreasing Term Insurance is taken out for a fixed number of years and is usually intended to cover a specific debt, such as a repayment mortgage. Because it reduces over time, it can be cheaper than Level Term insurance.

Decreasing Term Life Insurance

With Level Term your family could:

  • Maintain their living standards
  • Clear any debts
  • Pay-off any mortgage

With Decreasing Term you could:

  • Protect your loved ones from a reducing debt, such as a mortgage
  • Get a cheaper premium than with Level Term (for the same initial cover amount)
  • Still get a fixed premium over your policy term

Mortgage Life Insurance: How does it work?

As a Decreasing Term policy is often taken out to cover a repayment mortgage, it doesn’t usually decrease by the same amount each month. This is to match the way the remaining balance of your mortgage gradually reduces. The cover therefore decreases slowly over time, so the lump sum should pay off the balance of your mortgage if you died.

This is because when making mortgage repayments, the amount you pay off the balance is very slow to begin with, as most of your repayments go on the interest.

As you pay off more of the mortgage, the remaining balance reduces more quickly.

Decreasing Term Life Insurance Infographic

Our Decreasing Term Life Insurance decreases in the same way to make sure your cover doesn’t reduce quicker than your mortgage balance.

Depending on the amount of cover you choose, this means your loved ones should be able to pay off the remaining balance if you died within the policy term.

At Beagle Street, our Decreasing Term Life Insurance decreases in line with a mortgage with an interest rate of 6%, regardless of what your mortgage interest rate is. If your mortgage interest rate is less than 6% then our Decreasing Life Insurance could clear the outstanding debt.

Your Beagle Street policy is not directly linked to your mortgage, as the payout could be used by your loved ones to cover any expenses, debt or living costs if you died.

Why choose Decreasing Term
Life Insurance?

> The premiums you pay remains the same every month.

> Decreasing Life Cover can often be cheaper than Level Term Life Insurance.

> It could be a good choice if you want to cover a debt that you’re paying off over time.

Couple deciding on life insurance options

Why choose
Decreasing Term
Life Insurance?

> The premiums you pay remains the same every month.

> Decreasing Life Cover can often be cheaper than Level Term Life Insurance.

> It could be a good choice if you want to cover a debt that you’re paying off over time.

Compare Life Insurance Types

Beagle Street offers two types of Life Insurance – Decreasing Term and Level Term.

If you’re undecided on which type is best for your circumstances, take a look at our guide to the two types and compare the benefits of each.

With all of our policies you can choose to add Critical Illness Cover and Child Critical Illness Cover.

Find out more

FAQs

Is the Decreasing Term Cover I receive based on my mortgage?

No, we do not ask for any information about your mortgage. It’s up to you to decide how much cover you need. Take a look at our handy Life Insurance calculator guide to help you work out how much cover you need.

What’s the difference between decreasing life insurance and mortgage payment protection insurance?

Decreasing Term Life Insurance pays out a single lump sum to your loved ones only if you die while the policy is active. You choose the amount you would like to cover at the start, and this gradually reduces over the life of the policy. The lump sum could be used to pay off your mortgage debt or for any other expenses.

As the name suggests, mortgage payment protection insurance, is used to cover your monthly mortgage repayments if you’re no longer able to pay due to ill health or unemployment. The policy usually covers your payments for a fixed period and up to a fixed amount.

Do I have to take out life insurance with my mortgage?

There is no legal obligation to have life insurance when buying a home with a mortgage. However, your lender might ask you to have life insurance in place to ensure the loan will be repaid if you should die before it’s paid off. You are free to choose from different life insurance types and providers that are right for your circumstances.

What happens at the end of the term?

As with both our Level and Decreasing Term insurance policies, the policy simply comes to an end. As Life Insurance is not an investment product, you won’t receive any money back. This is usually a good time to reassess your circumstances and consider whether you need another Life Insurance policy.

Will my monthly payments change over time?

No. Payments are agreed and fixed at the beginning of your policy and are guaranteed to remain the same for the life of your policy (unless you cancel or have a successful claim against the separate Critical Illness part of your policy, in which case your premium will go down).

FAQs

Is the Decreasing Term Cover I receive based on my mortgage?

No, we do not ask for any information about your mortgage. It’s up to you to decide how much cover you need. Take a look at our handy Life Insurance calculator guide to help you work out how much cover you need.

What’s the difference between decreasing life insurance and mortgage payment protection insurance?

Decreasing Term Life Insurance pays out a single lump sum to your loved ones only if you die while the policy is active. You choose the amount you would like to cover at the start, and this gradually reduces over the life of the policy. The lump sum could be used to pay off your mortgage debt or for any other expenses.

As the name suggests, mortgage payment protection insurance, is used to cover your monthly mortgage repayments if you’re no longer able to pay due to ill health or unemployment. The policy usually covers your payments for a fixed period and up to a fixed amount.

Do I have to take out life insurance with my mortgage?

There is no legal obligation to have life insurance when buying a home with a mortgage. However, your lender might ask you to have life insurance in place to ensure the loan will be repaid if you should die before it’s paid off. You are free to choose from different life insurance types and providers that are right for your circumstances.

What happens at the end of the term?

As with both our Level and Decreasing Term insurance policies, the policy simply comes to an end. As Life Insurance is not an investment product, you won’t receive any money back. This is usually a good time to reassess your circumstances and consider whether you need another Life Insurance policy.

Will my monthly payments change over time?

No. Payments are agreed and fixed at the beginning of your policy and are guaranteed to remain the same for the life of your policy (unless you cancel or have a successful claim against the separate Critical Illness part of your policy, in which case your premium will go down).

Your next decisions:

How much cover do I need?

Don’t know how much cover you need? Use our handy Life Insurance calculator for help.

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What’s different about us?

We make Life Insurance simple, find out some great reasons to buy Life Insurance with Beagle Street.

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Guides

Check out our collection of handy guide pages to help answer any further questions you may have about Life Insurance.

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