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A level term life insurance policy pays out a set amount, regardless of when you pass away.
But the pay-out for a decreasing term life insurance policy goes down as time goes on.
You might be wondering why you would need a pay-out that goes down over time
It's usually taken out to cover a specific debt, like a mortgage
So your dependents can use the pay-out to cover the rest of the mortgage payments
The amount you owe on your mortgage should decrease over time, so the pay-out you'll need should also go down
And although the amount you pay each month will stay the same
The decreasing pay-out means these policies are usually cheaper
A level term policy pays out the same amount for the whole time you're insured
So you might choose this if you want to leave money behind to help with living costs or expenses like tuition fees
The guaranteed full pay-out means yuo'll usually pay more in premiums for level term cover
So which type of life insurance should you get?
Think about the pay out you want to leave to your loved ones
If it's to pay off an outstanding debt like a mortgage, a decreasing term policy might be for you
But if you want to leave a bigger lump sum you might prefer level-term cover