When it comes to protecting your family and financial future, choosing the right type of life insurance is essential. Two of the most common policy types in the UK are level term life insurance and decreasing term life insurance. While both offer valuable protection, they serve different purposes depending on your circumstances.
At LTC Mortgages, we’re here to help you understand the differences so you can make an informed decision.
What is Level Term Life Insurance?
Level term life insurance provides a fixed lump sum payout if you die during the policy term. It’s called “level” because both your premiums and the payout amount stay the same throughout the policy’s duration.
Key Benefits of Level Term Life Insurance
- Fixed Premiums
You pay the same monthly or yearly premium for the entire policy term, making it easy to budget. - Consistent Payout
The lump sum payout remains unchanged, offering stable financial support for your beneficiaries. - Cost-Effective When Young and Healthy
If you’re in good health and apply at a younger age, premiums are generally lower—making it a smart long-term investment. - Simple and Easy to Understand
Choose a policy length (e.g. 10, 20, or 30 years), and you’re covered for that period at a set rate. - Family Protection
Provides a safety net for your loved ones, helping to cover household expenses, education costs, or lost income. - Financial Obligations
Offers peace of mind that your children or dependents are financially supported until they become independent.
Best for:
- Protecting family income
- Leaving a lump sum
- General long-term financial protection
What is Decreasing Term Life Insurance?
Decreasing term life insurance is designed to cover debts that reduce over time—like a repayment mortgage. The payout amount decreases over the term of the policy, reflecting the declining balance of your loan.
Key Benefits of Decreasing Term Life Insurance
- Tailored Mortgage Protection
Ideal for repayment mortgages, as the cover reduces in line with your mortgage balance. - Lower Premiums
Typically cheaper than level term insurance, making it a popular choice for those on a budget. - Financial Planning Alignment
Matches your policy to your financial liabilities—ensuring you’re not overpaying for more cover than you need. - Peace of Mind for Homeowners
In the event of your death, the policy can cover the remaining mortgage debt so your family isn’t left with the burden. - Simple Structure
Like level term, it lasts for a set number of years—but the payout decreases over time as your debts reduce.
Best for:
- Repayment mortgage cover
- Budget-friendly protection
- Financially efficient planning
Which Life Insurance Policy Should You Choose?
The right policy depends on your personal circumstances and financial goals:
| Situation | Recommended Policy |
| Repayment mortgage | Decreasing Term Life Insurance |
| Family protection or income replacement | Level Term Life Insurance |
| Fixed lump sum for loved ones | Level Term Life Insurance |
| Budget-conscious mortgage cover | Decreasing Term Life Insurance |
Still unsure? That’s where we come in.
Get Expert Life Insurance Advice Today
At LTC Mortgages, we help clients across the UK find the best life insurance cover to suit their needs. Whether you’re securing your first home or planning for your family’s future, we’ll walk you through every step—free of jargon and pressure.
We work with leading UK providers including Aviva, Legal & General, Vitality, Zurich, LV=, Guardian, and more.
Contact Us for a FREE Quote:
Phone: 0151 662 0188
Email: [email protected]
Website: www.ltcmortgages.co.uk
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