Insurance Center

Life insurance doesn’t have to be as expensive as you think. If you need cover but you’re counting the pennies, think about going for a low-cost policy.

When people buy life insurance they often go for a level term assurance policy where you choose how much cover you want and for how long. Typically, you might want to have cover in place until you pay-off your mortgage, your children become financially independent or you retire.

With a level term policy, the amount of cover you have stays exactly the same for the whole term. But this can make the policy more costly. Here’s an alternative plan.

In this example you need life insurance protection to cover your mortgage. Then your family won’t be left to foot the mortgage repayments should the worst happen to you.

But rather than using a level term assurance policy, go for a decreasing term assurance plan instead. Decreasing term assurance, also known as mortgage protection assurance, covers the outstanding debt on your repayment mortgage.

As you pay-off a bit of your mortgage every month, the debt you owe your lender gradually reduces. In a similar way, the cover provided by your decreasing term life insurance policies also reduces over time. And because the cover is decreasing, the life insurance premiums will be cheaper.