Life insurance
Covers you against: Death or terminal illness
Benefit paid: Lump sum
Level Term Assurance: This type of policy is where the amount of cover, which is also known as the ‘sum assured’, remains at the same level through the length of the policy. This type of policy is often taken out to help pay off a mortgage and is most suited to interest only mortgages, where the amount owed does not decrease over time.
Decreasing Term Assurance: Again this policy pays out a cash lump sum in the event of death, but the amount of money paid out decreases over time. These policies are a good fit when taken out alongside a repayment so the premiums are typically cheaper than they are for level term assurance.