Decreasing term life cover is designed to help your loved ones pay off your financial commitments such as a repayment mortgage, loans or credit card balances if you pass away during the term of the policy.
The idea is that the amount of cover paid out goes down each year for the length of the policy eventually finishing at £0. This is usually in line with an outstanding debt you want to pay off - meaning you won’t leave your family with the bill if you pass away within the policy period.
What you pay stays exactly the same for the duration. The cover amount will eventually finish at £0, just like any debt commitment that you want to pay off - meaning you won’t leave your family with debts if you pass away during the term of the policy.
The interest rate on your mortgage will also affect your insurance. Most providers cap their decreasing term life insurance cover between 6% and 8%, meaning that if your mortgage has an interest rate higher than this, then your insurance may not clear your total debt. Post Office Decreasing Term Cover is capped at 7%.