How does decreasing cover insurance work?
The amount you are covered for gradually reduces over
time.
With decreasing cover, the sum you are insured for steadily
decreases during the policy’s term so that at the very end, the
sum insured is virtually nil.
Mortgage Life Insurance is a form of insurance with decreasing
cover. Mortgage Life Insurance is used in conjunction with a repayment
mortgage. The idea is that you only pay for the cover that you need to
repay your outstanding mortgage capital. As you gradually pay back your
mortgage, the capital sum gradually reduces and therefore the amount of
cover you need also reduces.
You can also have level cover insurance. This is where the
amount you are covered for remains constant throughout the term
of the insurance.
Other relevant questions…
What
kind of insurance do I need if I have a Repayment Mortgage?
What
kind of insurance do I need if I have an interest only Mortgage?
secured loans
Mortgages
Is Life Insurance for me?
What else do I need to know about Life Insurance?
How do I get a Life Insurance Quote?
How do I choose the right policy for me?
What if I need cover to be arranged quickly?
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How are premiums calculated?
What if I have to make a claim?
Do I need Mortgage Life Insurance instead?
Should I consider Critical Illness cover?
What other sorts of Insurance should I think about?
How do I make a complaint?
What do I need to know about the law and Life Insurance?
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