Level and decreasing cover can be used for many different reasons it could be to cover a loan such as a mortgage or it can be used for family protection.

Whatever the the reason for wanting the cover, the main question will be what type is most appropriate to meet your needs.  At CMS Ltd, we have the knowledge and experience to help you.

LEVEL TERM ASSURANCE

This plan will ensure that no matter what length of time passes whilst in the term chosen, the cover will remain constant.

So for example, if you took a £100,000 policy for 20 years and there was a claim made in year 1 the full £100k would be paid out.  If a claim was not made for 19 years the amount of the cover would be exactly the same £100k.

You can choose to have some form of inflation proofing in place for example having the plan index linked. This way the money would gradually grow as it tries to stay ahead of inflation so that it does not erode the value of the cover.

If we relate this to a mortgage then this is particularly useful for someone with an interest only loan where the capital has not been repaid so the amount needed stays the same the whole way through the term.

DECREASING MORTGAGE INSURANCE PLAN

A Decreasing Life Insurance plan is one where the sum assured reduces throughout the term of the plan.  

For example, if you take out a policy for £100,000 over a term of 20 years, your plan will gradually reduce over this term at a set pace that would eventually mean that by the end of the 20 years there would nothing left to pay out.