Initially, it is probably best to be completely clear of the meaning, ‘Term Life Insurance’. Term Life Insurance (sometimes called: ‘Term Assurance’) is a policy which covers a set amount of years for a premium (or cost – that could be paid monthly) that is stipulated and agreed upon at the outset. Term policies do not accumulate cash value and tend to pay out only in the event of the policy-holder’s death.

Level Term Life Insurance is essentially the simplified policy similar to the above. A price will be set out by the policy-holder and insurer, such as a monthly premium, as well as the amount to be paid out, for example £50,000 to pay-off a mortgage. If the policy holder dies five years or 15 years into the term, they will still be eligible for the full £50,000 providing the claim is made within the term set at the outset, and all full payments have been made on time.

For added flexibility for the customer, some life insurance companies offer the option of Decreasing Term Life Insurance instead. This differs to a Level policy because the pay-out is set up to decrease year on year, so when £50,000 might be owed in the first year, the policy-holder may just be eligible for £25,000 five years down the line. Such a policy might be suitable for a policy holder who is paying off their mortgage in chunks year on year and who, for example, would have significantly less to pay off five years on.

Generally, Decreasing Term Life Insurance is often favoured because of cheaper premiums for a satisfactory amount of cover. Whereas, Level Term Life Insurance will ensure a lump sum payment to the beneficiaries as long as the claim is made at any time during the term.

To request a decreasing term life insurance quote, customers can approach the local insurance agents or brokers. Customers can also apply online to obtain a quote for this kind of policy.

As all term life insurance policies are pure death benefit policies, there are fewer complications involved in it. This means that in term life insurance, there are no cash value accumulations, loan values, or partial surrender values. This makes them easier to apply for and also understand the quotes generated for them. The forms of term life insurance are level term life insurance, decreasing term life insurance and annual renewable term life insurance. Level term life insurance has a continuous and level face amount through out the term of the policy. Most of the level term life insurance policies include the privilege of guaranteed conversion. Annual renewable term life insurance is the least expensive of all term policies as it is renewed every year. Therefore, the premium also increases with the increase in the customers’ age.

Decreasing term life insurance is usually purchased to cover the mortgage debt. In this type of policy, insurance decreases at almost the same rate as that of the mortgage debt balance. This means that the death benefit of the policy also keeps declining along with the debt. Therefore, such policies are less expensive than level term life insurance policies. As these policies are usually taken to cover mortgage debts, their quotes can be competitive.