Decreasing life insurance question

Pineapple7

I was wondering if anyone could advise me on how much a decreasing life insurance policy would decrease by yearly or where to find this information?

I’m considering a decreasing term policy but would like to know how much it would pay out at certain points of the policy.

strawb_shortcake

It decreases in line with your mortgage, use a mortgage calculator with your interest rates and term to get a rough idea. I think it assumes an interest rate of around 8% though so should work more in your favour.

Pineapple7

Sorry I completely forgot to add that I’m not using it to cover a mortgage, I wanted a higher sum while my children are younger decreasing to a smaller sum when they are adults and are more financially stable.

Quentin

This will all be set out in the Policy

ACG

This will be one of those things that will depend on the details. Typically you will find the cheapest policies have a lower interest rate that they calculate against (that is one of the ways they are able to get the premiums down).

Typically:
The interest rate it covers,
The term,
The initial sum assured.

This calculator may help - https://www.legalandgeneral.com/adviser/protection/doing-business-with-us/tools-calculators/decreasing-term-calculator/tool/

HappyHarry

Pineapple7 wrote: »

Sorry I completely forgot to add that I’m not using it to cover a mortgage, I wanted a higher sum while my children are younger decreasing to a smaller sum when they are adults and are more financially stable.

You could also consider two policies, for example, a first policy covering a large amount that runs until the children are adults, and then a second policy covering a smaller amount for a longer term.

Alternatively, you could look at a Family Income Benefit plan. This type of plan pays a monthly income to your beneficiaries in the event of your death. This type of policy is a type of decreasing term, and often ideal for covering regular expenditure needs in the event of your death.