Decreasing Term Life Insurance

Decreasing Term Life Insurance!

This type of term life policy is not widely used anymore and if it is it is typically sold only by a handful of carriers. The insurance companies that sell these types of policies are usually PPGA’s which stands for personally producing general agents, all this means is that an agent is appointed with a certain company directly. As opposed to being appointed with a brokerage general agency.

What is decreasing term life insurance?

This policy design was originally used to pay off a loan or some sort of debt that was amortized over a period of years. So this type of insurance was often called mortgage term life insurance as well. How the policy worked for example say you had a mortgage of $500,000 and you take out a policy for $500,000. Over the years the face amount of the policy would decrease along with the balance of your mortgage, hence decreasing term. So what happened to this policy, well level term life insurance rates and premiums have become so cheap and affordable that it really doesn’t make sense to purchase a decreasing policy. If you could pay the same amount of premium of a guaranteed level policy as you could for a decreasing term why wouldn’t you take advantage of the level face amount death benefit?

That is why we here at the PROS do not recommend a decreasing policy, especially when you can get the same death benefit level term life plan for almost the same cost. We can help you get the best rates and quotes for your specific needs, with up front underwriting and pricing so you know about where you will be in payments. If you are looking for mortgage term life protection then you should really check out a level term life insurance policy this plan should do just fine in coverage and pricing.