Mortgage Protection or Decreasing Term Assurance (DTA)
Decreasing Term Assurance is usually a plan set up to repay the outstanding loan of a Principal & Interest mortgage. It pays out a lump sum in the event of death, which reduces during the term of the plan. At the outset you choose the initial sum assured you would like and the term of the plan.
During the life of a decreasing term life assurance policy the sum assured reduces every month in gradual steps, to nil at the end of the term. A decreasing term life insurance policy would normally be used to cover a mortgage or other loan where the amount owed reduces each month as you make loan repayments, such as a repayment mortgage.
Decreasing Term cover ensures that the amount of cover is tailored to just cover the loan and no more each month. This makes it the cheapest life insurance to cover a repayment mortgage. Decreasing Term life Insurance is cheaper than Level Term Assurance.
However, since these plans are usually tailored to a particular mortgage and property, if you subsequently sell that property and buy another one, the chances are that the new mortgage will be different than the original. The original DTA will then be "out of sync" with the new mortgage.
In order to determine the best solution for you, meet with one of our advisers, who will asses your current situation, or issue that you want addressed, and will construct an effective affordable solution specially tailored to fit your needs.