Term cover whose pay-out falls over time, usually tracking a repayment mortgage.
A decreasing term policy starts with a sum assured that reduces over the term, broadly in line with the shrinking balance of a repayment mortgage. Because the insurer’s potential liability falls each year, premiums are lower than for level term cover of the same initial amount. It is designed to clear a specific debt rather than to leave a general lump sum, so it does not grow with family needs — it shrinks with the debt it was matched to.