Mortgage Protection / Decreasing Term

Mortgage Protection or Decreasing term as it is also known, is very similar to Level Term cover, in that you start off with an amount of cover you need, usually the same amount as your mortgage, and over the same term as your mortgage. The main difference is that the amount of cover you start with reduces as the mortgage amount comes down, the aim is that there will always be enough to repay the mortgage should you or either of you, if a joint policy, dies during the term of the mortgage.

The aim of this plan is to repay the mortgage on death so that the property can be left to family if one person owns. Or if jointly owned, the family and children can carry on living in their home, without having to worry about paying a mortgage.

As above the monthly premiums are usually guaranteed, so will not increase for the whole term of the policy

An example would be if you had a mortgage of say £150,000 over 25 years, the policy would start at £150,000 over 25 years, decreasing to £0 after the 25 years finish as the mortgage should also be finished.