Increasing Term Life Assurance

Increasing term life assurance is a policy that increases the level of payout received over time, in the event of your death.

Increasing term life assurance is designed to protect the value of the payout against inflation. For example, if you take out a £150,000 policy, the relative value of the payout would be less if you died 20 years into your policy in comparison to if you passed away two years into your policy, despite the payout remaining exactly the same, in monetary terms.

The level of cover typically increases every year along with the Retail Price Index (RPI).

Who is increasing term life assurance for?

Increasing term life assurance is best suited to those who want to leave a substantial payout to help their family maintain a certain standard of living. As the cost of living increases, the value of a set payout diminishes, meaning an increasing term payout keeps up with the rate of inflation to provide better relative value.

This is in contrast to a decreasing term policy, which is designed to pay out less over time, perhaps in line with a capital repayment mortgage debt.

A level term policy pays out the same amount from the first day of the policy to the last, which is perhaps well suited to an interest-only mortgage.

An increasing term policy can also be useful for a number of other reasons, such as:

• Offsetting inheritance tax
• Covering funeral costs
• Aiding in a house deposit for children
• Paying education costs
• Where you expect your debts to increase over time

Considerations of an increasing term life assurance policy

Due to the increased payout over time, it’s likely an increasing term policy will require higher premiums than other types of life assurance. It could also be that the cost of the premium increases over time in line with the increased level of payout.

Some plans may also have a maximum amount for which you can be insured.

Reputable Advice and Guidance

Increasing term life assurance can be affordable and easy to arrange – however shopping around for life assurance quotes and completing online quote applications can be time-consuming and confusing, so it’s best to let a professional adviser handle this for you.

So you could talk to us instead. We have a sound knowledge of the life assurance market and can help you choose a policy from one of the robust and reputable assurance companies we have good relationships with. We’ll give you a comprehensive view of the assurance companies we use to help you choose the right Increasing Term Life assurance that will see you through your mortgage years.