Decreasing life insurance, more properly called decreasing term life insurance, is a type of term life cover where the payout reduces over time, usually broadly in line with a falling repayment mortgage balance. You choose a starting amount and a term, and the sum assured winds down over the years until the policy ends. It’s often called mortgage life insurance because it’s designed for exactly that job: clearing a debt that shrinks as you pay it off. Importantly, although the cover reduces, your premiums normally stay fixed for the whole term, because the price is calculated across the full term at outset. If you’re still alive when the term ends, the policy simply stops with no payout, as with term insurance generally.

Yes, decreasing term is generally the cheapest type of life insurance. Because the potential payout reduces each year, the insurer’s maximum liability falls over time, so premiums are typically 20 to 40% lower than level term for the same starting sum assured and term, and some comparison data suggests it’s around £14 a month cheaper on average. That affordability is a big part of its appeal, and why it’s the default recommendation from many mortgage brokers for a repayment mortgage. However, cheaper isn’t automatically better: decreasing term is only the right choice if a reducing payout genuinely matches your need. If you want to leave a fixed lump sum for your family, level term is usually more appropriate despite the higher cost. Your actual price depends on your age, health and cover, so compare a personalised quote.

It’s worth it when your main goal is to clear a repayment mortgage or another reducing debt if you die, and you’re comfortable that the cover shrinking in line with that debt is exactly what you want. For that specific job it’s a clean, purpose-built and cost-effective match. It’s less suitable if you want to leave a fixed lump sum for your family beyond the mortgage, or if you have an interest-only mortgage where the full capital stays owed at the end, in which case level term usually fits better. So decreasing term is worth it for the right need, not as a blanket choice. The honest test is to match the shape of the cover to the shape of what you’re protecting, rather than simply choosing the cheapest premium.

Generally no. Decreasing term is designed for a repayment mortgage, where the balance falls over time, so the cover can wind down alongside it. With an interest-only mortgage, you only pay the interest each month and the full capital is still owed at the end of the term, which means a decreasing payout would reduce to very little just when you’d still need the full amount to clear the debt. For an interest-only mortgage, level term life insurance usually fits far better, because the fixed payout stays high enough to cover the outstanding capital throughout. Matching the policy type to the mortgage type is one of the most important decisions here, so it’s worth understanding which mortgage you have before choosing.

Yes, most insurers let you add critical illness cover to a decreasing term policy, so it would pay out if you were diagnosed with a listed serious illness as well as on death, helping clear the mortgage in either event. Adding critical illness increases the premium, sometimes substantially, because it covers more scenarios, but it can be valuable protection for a mortgage since serious illness is statistically more likely than death during working age. As with the life cover itself, the critical illness element on a decreasing policy typically reduces over the term. Whether to add it depends on your budget and how much you want to protect against illness as well as death. Comparing quotes with and without critical illness helps you see the cost difference clearly.