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What is Decreasing Term Assurance?

There are two main types of mortgage:

  1. The repayment mortgage. We suggest a decreasing term life assurance policy (see below).
  2. An interest only mortgage. We suggest a level term assurance policy.

Decreasing Term Assurance (to cover a loan) is a form of Mortgage Protection

Decreasing Term Assurance Product Features:

  • Fixed term of years selected to match your mortgage. Ÿ
  • Sum assured decreased to reflect the outstanding loan amount each year. Ÿ
  •  Sum assured is paid out on death during the policy term. Ÿ
  • No benefit on survival. Ÿ
  • No surrender value. Ÿ
  • Level premiums throughout the term of the policy.

Reducing Term Life Assurance Policy Benefits:

  • Low cost protection cover used in conjunction with a repayment mortgage.
  • Cover can be purchased with or without critical illness cover. Ÿ
  • Normally includes terminal illness benefit as part of the standard policy. Ÿ
  • Accepted by most major lenders as suitable cover for your mortgage. Ÿ
  • Cover reduces to match the outstanding mortgage amount. Ideal for re payment mortgages or loans. Ÿ
  • Premiums guaranteed not to increase from acceptance for the policy term.

Reducing Term Cover Policy Limitation: Ÿ

  • You may want to extend the term, but this is not possible. Ÿ
  • You may be ill at the end of the plan and be unable to obtain further cover. Ÿ
  • No investment element. Ÿ
  • The reducing sum assured will not take account of inflation. Ÿ
  • If you increase your mortgage you will need to affect a new policy to cover the extra borrowing.

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