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Decreasing Term Assurance A form of life assurance that pays a lump sum if you die or, as is the case with some policies, if you are diagnosed as having a terminal illness, during the term of the policy. However, unlike a level term assurance policy, the lump sum that is paid gradually reduces over the term of the policy. The reducing life cover under this type of policy means that the premiums are lower too - although it is worth checking how much level cover would be as sometimes the differences are not great! This type of cover is often also call mortgaqe protection assurance, as it is most commonly used to protect the repayment of a reducing debt - such as a repayment mortgage, a loan, school fees etc. These policies are often also available with a critical illness option at extra cost. This would then provide a lump sum if you were to die or suffer a serious illness during the term of the policy. If you live to the end of the term the policy expires and no payment is made. Similarly, if you stop paying the premiums at any time, cover will cease. You can take out decreasing term assurance either in your own name or in joint names.
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