Critical Illness Cover Decreasing
Posted on February 5th, 2011 in All Posts, Critical Illness Cover, Life Insurance for Mortgage Protection. A decreasing critical illness insurance policy is just a form of decreasing term insurance which is looked at in the linked article. However instead of just covering life insurance these policies also cover critical illness insurance definitions or critical illness only. The most popular use of these policies is to use them to protect debt such as mortgage or business debt.If you have a repayment mortgage then the debt over the term will reduce. Over the term of say 25 years you will be reducing the capital by a small amount at first but more and more as time goes on. This is shown in the table:
As you can see the mortgage debt is decreasing and this the amount of insurance required to clear the debt should also reduce. A decreasing critical insurance plans sum assured will reduce in line with the debt owed on a repayment mortgage as the graph above illustrates.
If the mortgage that you have is on a interest only basis then a level term life insurance or level term critical illness insurance is recommended. However it is all down to affordability and budget and this is why it is best to get financial advise on protection. To get advice from a qualified financial adviser fill in the enquiry form.
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