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Life insurance

Life vs decreasing life insurance

Helping you decide which best suits your needs

It can be difficult choosing between the different kinds of life insurance available to buy. We offer two types (both provided by Legal & General) each with a specific purpose in mind:

  1. Life insurance
  2. Decreasing life insurance

Neither offers superior protection over the other, so when deciding between them you should think about what you want to help protect.

To protect your family: Life insurance

Level term insurance is often used for family protection. As with all term insurance it's flexible – you choose the amount of cover you need, and how long you would like the policy to run. It gives you peace of mind, as you know the cover will not decrease and will always pay out the same amount, unless you alter your policy.

Extra benefits

All our policies come with a number of extra benefits at no extra charge, including terminal illness cover and accidental death benefit, covering you if you die within 90 days following an accident.

Please read the 'Key Features' (PDF) document for more information.

You can also choose to put any of our policies in trust. You decide who'll receive the proceeds of your life insurance policy; placing the plan in trust removes the need for probate, so your loved ones benefit more quickly. Placing a life insurance policy in trust can also help protect against inheritance tax.

To protect your mortgage: Decreasing life insurance

Decreasing life insurance policies have a clear use: to help pay off an outstanding mortgage or loan in the event of your death during the length of the policy.

Taking out a mortgage protection policy could mean that in the event of your death your family could stay in the family home, without worrying about paying off the outstanding mortgage. You can choose between two types of policies when taking this out:

  • mortgage decreasing term insurance
  • mortgage term insurance

Mortgage decreasing term insurance means that the cash sum that the policy will pay out decreases over time – roughly in line with a repayment mortgage or loan. The idea is that the amount of cover decreases alongside the remaining mortgage debt.

A mortgage term insurance policy has a cash sum that does not decrease. The sum it pays out remains level while the policy is running.

The graph below illustrates the differences between the cash sum for level and decreasing term assurance based on an example with an amount of cover, of £100,000.

Are you moving house?

Some mortgage protection insurance plans include extras that are specifically tailored to meet your needs if you're moving house. Our mortgage life insurance provides free life cover if you're buying a property, between exchange of contracts and completion of your purchase (or in Scotland, complete missives).

Please read the 'Key Features' (PDF) document for more information.

It's possible to get the best of both worlds

You can have more than one life insurance policy, so you might decide to take out a policy that helps to cover your mortgage and a separate one that protects your family. Or you could choose a life insurance policy that protects both.

Critical illness cover can be added to either of these policies for an additional cost.

Life insurance

Our life insurance range has been specially chosen for you to help you financially protect your family and their lifestyle.