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.