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Level Term or Decreasing Life Insurance

Life Insurance Policies
Level Term or Decreasing Life Insurance Image

Disclaimer: This page is to be used as a resource if you are considering life insurance. nowsure does not offer decreasing term life insurance.

Are you trying to decide whether level term or decreasing life insurance is the right choice for you? Each one has unique features, that we will explore.


At nowsure, we work with the UK’s top insurance providers to offer affordable life insurance plans that our customers can rely on. We help you decide by drawing a handy comparison. So, let’s get started!

Level Term and Decreasing Life Insurance: Key Differences at a Glance

The differences between level term and decreasing life insurance can be narrowed down. 


Level Term Insurance

Pros Cons
  • Lump sum payout is always the same.
  • If you take out the policy in good health, premiums can start low and stay low for the duration of the cover.
  • You can choose the policy term to suit your needs, whether it is 5, 10, 20, or 30 years.
  • Payouts do not adjust with inflation.
  • If you take out the policy in poor health, premiums could start high and stay high for the duration of your cover.
  • If your needs change during the policy term, you might not be able to adjust the cover accordingly, as the sum assured stays fixed.


Decreasing Life Insurance Explained

A decreasing life insurance policy is specifically designed to cover repayment mortgages.

Decreasing life insurance provides coverage that reduces over time. This is in line with the decreasing balance of the mortgage as it gets paid off. This is unlike level term life insurance, where the payout that your beneficiaries would receive remains constant throughout your policy’s term.

The purpose of decreasing life insurance is to provide mortgage protection to the policyholder’s family in the event of their death.

Pros and Cons of Decreasing Life Insurance

People who may want to consider this type of insurance include homeowners who have a repayment mortgage or those with declining financial responsibilities. 

Pros Cons
  • Decreasing life insurance is generally cheaper than level term policies, because the payout received reduces over the policy’s term.
  • It is often used to cover a repayment mortgage where the outstanding balance decreases also over time. 
  • The coverage you would receive reduces over your policy’s term. Therefore, while it is suitable for mortgage protection, it may not be ideal for your other long-term financial needs, like income replacement or leaving a lump sum to your dependents.
  • Once your policy is in place, the term and cover reduction are fixed. This means that there is limited flexibility in adapting to changing circumstances.
  • This type of insurance does not accumulate a cash value. This means that if you cancel the policy or it expires without a claim, you will not receive any payout.


It is important to remember that choosing the most suitable type of life insurance completely depends on your individual circumstances. We have an online life insurance calculator that can help you to decide how much cover you might need.


Have a Mortgage or Other Expenses to Consider? Get in Touch Today!

At nowsure, we have created a hassle-free comparison service that makes it easier for people with busy schedules to find insurance which is suitable for their needs and their budget. We work with a panel of trusted insurers to offer tailored insurance plans that our customers know they can rely on.


Please do not hesitate to contact us for more information. We are always happy to help you. 

Ready to get cover? Get your hassle-free quote today.