Decreasing term life insurance calculator

  • Cover for a specified period (up to 40 years)
  • Lump sum pay out if you pass away during the term
  • Sum assured up to £1,000,000 (will decrease over time)
  • Get an instant sum assured estimate using our calculator tool
  • Usually the cheapest form of cover (starting from just 20p-a-day ¥ )
Decreasing term life insurance summary


You may not know where to start when trying to calculate how much decreasing term life insurance you might need.

Decreasing term life insurance is often used to help cover a mortgage, as your sum assured (cover amount) can reduce alongside your mortgage balance.

Therefore, your sum assured will likely mirror your remaining mortgage balance.

Use our decreasing term life insurance calculator (below) for an instant sum assured calculation.

Decreasing term life insurance pay out calculator

Enter your financial commitments and key costs below to understand how much decreasing term life insurance you might need.

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£137,934 is the estimated mortgage debt per household in the UK.

The purchase of a home is likely to be the largest financial commitment any of us will make in our lifetime. Your life insurance should cover your remaining mortgage balance to allow your loved ones to stay in the family home should anything happen to you.

Source: Moneynerd.co.uk
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The average monthly household budget in the UK is £2,548 (that’s £30,576 per year), which is spent on transport, food & drink, utilities (gas, electricity, water etc), clothing, council tax and leisure activities.

With energy prices hitting a record high and the cost of living rising sharply in the UK, you may wish to factor in utility bills and family living expenses into your cover.

Source: Nimblefins.co.uk
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The average personal debt of UK adults has risen to £34,566 (not including mortgage debt), with credit cards, personal loans and overdrafts being the most common forms of debt.

Factoring in any debts into your life insurance cover means that, if they need to be paid back from your estate after your passing, your loved ones won’t miss out financially.

Source: Money.co.uk
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According to SunLife, the average cost of a funeral in the UK is £3,953 (with the overall cost of dying at £9,200).

Funeral costs have increased by 116% since 2004 and are a significant cost which should be factored into the amount of life insurance you secure.

Source: SunLife.co.uk
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When factoring in cover for your children, you may wish to calculate the amount based on how long it is until they reach financial independence.

This could include childcare (£7,000 per year for part-time care), school expenses (£1,519 per school year for uniforms, lunches, stationary etc), as well as an additional sum for further education (this could be a contribution of up to £5,000 per year).

Sources: Daynurseries.co.uk, Primarytimes.co.uk & Savethestudent.org
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2 in 5 adults say they are relying on an inheritance to fund their retirement.

Factoring in an inheritance to your sum assured could allow loved ones to live a more financially comfortable life. Alternatively, you could leave a cash gift to a charity of your choosing.

Source: Moneyage.co.uk
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If you’re lucky enough to have your own savings or are part of the 30% of UK residents who already have a life insurance policy in place, this can provide financial protection for loved ones.

By entering your current cover, savings or death in service amount you can reduce the sum assured you require.

Source: Scottishbusinessnews.net
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Why not compare multiple decreasing term life insurance quotes using our award-winning broker service?

Our service is fee-free and quotes start from just 20p-a-day.

Alternatively, keep reading to find out more about decreasing term life insurance. Jump to:

What is decreasing term life insurance?

Decreasing term life insurance is a form of term life insurance; a policy which provides cover for a specified period (the term) and pays out if you pass away during this time.

Your sum assured will reduce throughout the policy term.

For this reason, it’s often a popular choice to help cover a repayment mortgage as you can mirror your sum assured and remaining mortgage balance.

In fact, it’s common for decreasing term life insurance to be referred to as ‘mortgage life insurance’.

Decreasing term life insurance key points:

  • Term based cover (often up to a maximum of 40 years)
  • Decreasing sum assured (your cover amount will reduce each year)
  • Terminal illness cover (is included at no extra cost)
  • Cheapest form of cover (your risk to the insurer reduces each year)
Compare Decreasing Term Life Insurance Quotes »

Why choose Reassured for decreasing term life insurance?

  • We’re the UK’s largest life insurance broker * with 15 years of experience
  • We can help you compare multiple decreasing term life insurance quotes from top insurers
  • We’re rated as ‘Excellent’ on Trustpilot, with over 75,000 customer reviews
  • You can use our buy online service to secure a policy in under 11 minutes ^
  • Decreasing term life insurance starts from 20p-a-day through us

How does decreasing term life insurance work?

With a decreasing term life insurance policy, you’ll be covered for a specified period (often up to a maximum of 40 years).

Your sum assured and policy term length will be agreed upon during the application. Once a policy is active, you’ll need to pay monthly life insurance premiums.

If you pass away during the policy term, a pay out will be made.

Throughout the policy term, the value of the sum assured will decrease. Typically, the value will reduce at a fixed rate of 6 - 8% per year (however, this could differ depending on the insurer).

Therefore, the further into your policy you pass away, the smaller the pay out to your loved ones.

If you reach the end of your policy term, your sum assured will reach 0 and your policy will expire.

How much decreasing term life insurance do I need?

As decreasing term life insurance is often used to protect a repayment mortgage, you can work out how much cover you might need by looking at your mortgage details.

Decreasing life insurance example:

If you have a mortgage term of 25 years and a remaining balance of £200,000 you may consider opting for a policy term of at least 25 years and a sum assured of at least £200,000.

You could also leave an additional sum to help your loved ones cover the cost of running a home (such as bills and utilities).

Why not use our free calculator tool at the top of this page to input your key costs and establish your ideal cover amount?

The best decreasing term life insurance

The best decreasing term life insurance for you will be the policy that meets your needs and fits your budget.

Below we have compared some of the UK’s leading life insurance providers:

Aviva Legal & General LV= Zurich Royal London AIG
Available to18 - 7718 - 7418 - 8418 - 8318 - 7017 - 86
Term length1 - 50 years5 - 50 years5 - 50 years1 - 50 years5 - 50 years2 - 70 years
Claims paid99.3%
of all life insurance claims		97.0%
of all life insurance claims		97.0%
of all life insurance claims		98.0%
of all life insurance claims		99.4%
of all protection claims		99.0%
of all life insurance claims

This information has been taken from each insurers website and is correct as of 20/09/24. Please note: while some insurers may offer cover to those aged 16 and 17, you must be over 18 to purchase a policy through Reassured. Not all insurers mentioned are available through Reassured

As you can see, the terms and conditions offered can vary between insurers. Therefore, it’s important to compare multiple quotes.

At Reassured we work with leading UK insurers to present you with our best deals.

Who offers the best term life insurance? Find out in our best life insurance companies guide.

How is decreasing term life insurance calculated?

The cost of decreasing term life insurance is calculated using your personal circumstances and the details of your chosen policy, including:

  • Age
  • Health & wellbeing
  • Smoking status
  • Lifestyle
  • Occupation
  • Policy term
  • Sum assured

We’ve used our award-winning broker service to compare the cost of decreasing term life insurance from some of the UK’s leading insurers.

Quotes are based on a non-smoker, in good health, for a decreasing term life insurance policy with a 20 year term and £150,000 of cover:

Age Aviva AIG Legal & General
20£3.95£4.68£4.99
25£4.41£4.77£5.21
30£5.12£4.94£5.69
35£6.06£5.73£7.06
40£7.99£7.90£9.52
45£11.62£11.39£14.00
50£18.84£17.22£21.38

Generally speaking, decreasing term life insurance is often the cheapest form of cover. However, as you can see from the table, the price you pay can vary depending on the insurer.

Using our fee free broker service you can compare multiple quotes at once to find our best deals.

Save Money » Compare Quotes from Top UK Insurers

Is decreasing term life insurance worth it?

Decreasing term life insurance could be worth it if you have dependents and a mortgage to protect.

There are some simple questions you can ask yourself to establish whether you would benefit from decreasing term life insurance:

  • Could your partner afford the mortgage repayments?
  • Would your family have to downsize?
  • Would your family have to sell their home to meet daily living costs?
  • Could your family afford household running costs?

Decreasing life insurance pros and cons:

PROsCONs
Often the cheapest form of coverThe further into your policy you pass away, the less your loved ones will receive
Ideal for protecting a repayment mortgage (as your sum assured can reduced in line with your remaining mortgage balance)Medical information will be taken into consideration during the application (which could lead to inflated premiums if you have a pre-existing medical condition)
Can be taken out on a joint basis
Includes terminal illness cover at no extra cost
You can choose a sum assured and term length to best meet your needs

A friendly member of our team can provide you with all the information you need to know about decreasing term life insurance to help you make a fully informed decision.

Why should I use a decreasing term life insurance calculator?

The main benefits of using a life insurance calculator tool include:

  • Get a better understanding of your cover needs (by inputting your financial commitments and key costs)
  • Receive an instant sum assured calculation (the hard work is done for you)
  • It’s free to use (you can use our calculator tool completely free of charge)

Learning how much decreasing term life insurance you’re likely to need can help you make more informed choices when you start the process of securing a policy.

Why not use our free calculator tool at the top of this page?

Compare decreasing term life insurance quotes

Using our decreasing life insurance calculator, hopefully you’ve now been able to estimate how much cover you may require.

To compare fee-free quotes, why not use our award-winning comparison service?

We use a panel, including some of the UK’s best life insurance companies, to provide you with our best decreasing term life insurance deals.

Quotes are fee-free, without obligation and start from just 20p-a-day.

Why not get started today?

Compare Decreasing Term Life Insurance »

Decreasing term life insurance FAQs:

How much does decreasing term life insurance decrease by each year?

Most decreasing term life insurance policies decrease at a fixed rate of 6 - 8% per year.

While it’s common for policies to decrease at this rate, it can vary depending on the insurer.

Therefore, it’s essential to be aware of the policy terms and conditions before securing a policy.

Can I take out joint decreasing term life insurance?

Yes, it’s possible to take out decreasing term life insurance on a joint basis.

Joint life insurance covers two lives simultaneously under one policy, with just one premium to pay.

Therefore, it can help you to save money on a policy.

However, only one pay out will be made (typically after the first death) and then cover will expire.

Can I write decreasing term life insurance in trust?

Yes, decreasing term life insurance can be written in trust.

Upon your passing, your life insurance forms part your estate (any property, savings and possessions you own).

If an estate exceeds the threshold of £325,000, it will be subject to inheritance tax (charged at 40%).

Writing your life insurance in trust can help to detach your policy from your estate, minimising/avoiding inheritance tax on the pay out.

Can I get decreasing term life insurance with critical illness cover?

Yes, critical illness cover can be added to decreasing term life insurance for an additional cost in your monthly premium.

Critical illness cover provides an additional layer of protection by allowing you to make an early claim if you’re diagnosed with a specific serious illness.

The funds could help to replace any lost earnings and/or pay for private medical treatment.

Can I buy decreasing term life insurance online?

Yes, through Reassured you can buy decreasing term life insurance online.

Our buy online service allows you to apply for and purchase a policy online in a matter of minutes.

Not only does buying life insurance online give you more control cover the application process, but you also have the freedom to purchase a policy whenever it suits you.

Can I cancel decreasing term life insurance?

Yes, you can cancel a life insurance policy at any point during the term.

Typically, most life insurance policies come with a 30 day cooling off period, where you can cancel your policy and receive a refund of any premiums paid.

If you cancel after this period, you won’t be refunded for any premiums paid.

What’s the difference between level term and decreasing term life insurance?

The main difference between level term and decreasing term life insurance is the sum assured.

Level term life insurance provides a fixed pay out (remains the same), whereas decreasing term life insurance provides a pay out which will reduce throughout the policy term.

At Reassured, we can help you compare both level vs decreasing term life insurance to help you find the right option for your needs.

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