Decreasing term insurance is a type of life insurance that pays out a death benefit if the policyholder dies during the term of the policy. The benefit amount decreases each year, typically in line with the mortgage balance of a repayment mortgage.
The policy pays out a lump sum to the policyholder’s beneficiaries in the event of the policyholder’s death, and the amount of the payout decreases over time as the mortgage balance is paid down.
Decreasing Term Insurance is typically used to protect a mortgage in the event of the policyholder’s death, as the payout from the policy can be used to pay off the remaining mortgage balance. This can help to ensure that the policyholder’s beneficiaries are not left with the burden of paying off the mortgage in the event of the policyholder’s death.
Decreasing Term Insurance is an important consideration for homeowners, especially those with young families, as it can provide financial protection in the event of the policyholder’s untimely death. It is important to carefully review the terms and conditions of a Decreasing Term Insurance policy and to choose a policy that meets the needs and goals of the policyholder.
Is it compulsory to have mortgage insurance?
“Do I need life insurance to get a mortgage?” is a commonly asked question by borrowers. The good news is that it’s not compulsory for you to take out a life policy when getting a mortgage.
