• Reducing cover: The sum assured decreases at a predetermined rate.
• Loan protection: The cover can be aligned with outstanding debts.
• Premiums: They generally remain the same throughout the policy term.
• Policy term: It should ideally correspond with the repayment period of the liability.
• Eligibility: Age, income, health, loan history and residency may be considered.

If you have a liability that reduces over time, compare term insurance plans to assess whether decreasing cover suits your financial needs.

A decreasing term insurance plan is a type of life insurance where the coverage reduces gradually over the policy term. The sum assured decreases at a predetermined rate, often matching the outstanding balance of a loan or mortgage. While the coverage decreases, the premiums usually remain the same, making it a cost-effective option for covering specific liabilities.

Decreasing term plans offer several distinct advantages, especially when you consider the benefits of term insurance, such as affordability, flexibility, and coverage that aligns with reducing financial liabilities over time.

• Tailored to liabilities: Designed to match decreasing debts, such as home loans, ensuring financial coverage for those specific obligations.
• Cost-effective premiums: Premiums are generally lower compared to level term insurance, making it affordable for long-term commitments.
• Customisable coverage: The decreasing rate can often be adjusted to align with the borrower’s specific loan repayment schedule.
• Focused protection: Provides targeted protection without the need to over-insure, which can be more cost-efficient for the policyholder.

What should you consider?

• Assess your liabilities: Identify the specific debt you want to protect, such as a home or business loan.
• Match the policy term: Choose a policy duration that corresponds with the repayment period of the liability.
• Compare premiums: Review premiums across available plans to understand the long-term cost.
• Check flexibility: Look for a plan where the reduction in cover can align with changes in your financial situation.

A well-matched policy can help ensure that the cover remains relevant as your outstanding liability decreases.

Eligibility for a decreasing term insurance plan typically involves the following:

Meeting these conditions does not automatically guarantee approval. The insurer may assess your application based on its applicable eligibility and underwriting requirements.

Check these factors before choosing:

• Sum assured versus liability: Check whether the reducing cover broadly matches your loan repayment schedule.
• Premium structure: Compare premiums across insurers for long-term affordability.
• Policy features: Check for additional benefits such as critical illness or accidental death riders, where available.
• Claim settlement ratio: Review the insurer's claim settlement ratio when assessing the insurer.
• Customer service: Consider the support available for policy servicing and management.

If you are protecting a home loan or another declining liability, compare coverage options to find a policy structure that fits your financial commitments.

Decreasing term insurance provides life cover that reduces over the policy term and can be aligned with declining financial liabilities such as home loans or business loans.

Before choosing a life insurance plan, assess the liability you want to protect, match the policy term with its repayment period and compare premiums and features. This can help you select coverage that remains relevant as your financial obligation reduces.