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Decreasing term insurance

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Decreasing term insurance. With a decreasing term life insurance policy, the amount of the death benefit decreases each year of the fixed term -- such as 20 years -- although the premium remains the same.

This type of insurance tends to be an economical way to protect your beneficiaries should you die unexpectedly during a period when you have substantial financial responsibilities.

For example, young parents with a large mortgage might consider decreasing term policies to help insulate each other against the responsibility of meeting their financial obligations should something happen to one of them.



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Decreasing term insurance can be taken out and this usually works alongside a mortgage where the outstanding mortgage would be paid out to your family so they would not have to struggle to pay it.
Level term cover does offer one advantage that decreasing term insurance does not.
The rate for decreasing term insurance is almost always lower than a level term insurance policy for the same time period because the coverage decreases.
 
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