Decreasing: The Safe Drop-off Zone

2007-03-08 10:33:40

( Financial )



DECREASING TERM LIFE INSURANCE

A decreasing refers to a lowering or reducing of quantity or unit of measure. Often, it pertains to a down trend or decline over a given period of time, like the decreasing of stock prices during the Great Depression.

Decreasing is a common term in life insurance. Decreasing term life insurance is a type of insurance where the benefits are decreasing with the passage of time. Decreasing term life stipulates that for every year that passes, the death coverage or benefits lessen until such time that the coverage face value becomes zero and the insurance eventually expires.

Premiums for decreasing term life insurance is lower than a regular life insurance but the premiums are constant all throughout the term. Decreasing term life insurance works for those who have high-risk jobs for a certain period of time, or for those who wants the option to change and renew life insurance from time to time. Decreasing term life does not tie you down to the coverage for your entire life span.

MORTGAGE PROTECTION INSURANCE

The term decreasing can also refer to a type of mortgage coverage insurance. You avail of this in case you want to protect your beneficiaries from the burden of your debts or mortgages in the event of your unexpected death.

This type of life insurance is also known as mortgage protection assurance. If you avail of this, you pay premiums to parallel your prevailing or latest mortgage principal. As the principal mortgage balance is decreasing each year, so does the amount of insurance benefits.

This way, the policy covers only the remaining mortgage or loan in the event of your death, and your beneficiaries are cleared of debts and can inherit your properties without any problems. Also, the premiums for this type of plan are fixed for the entire duration of the policy.


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