Jargon Buster - Definition of Decreasing Term Assurance

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Decreasing Term Assurance

is a life insurance policy that has a value which decreases each year. For example a policy taken out for 100,000 may decrease to 98,000 the following year and then 94,000 the year after, and so on until the policy ends. The advantage of decreasing policies is that they are cheaper than Level Term Assurance policies. Decreasing Term Assurance polices are often used to cover repayment mortgage and loans.

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Please note that all definitions are intended for general guidance only. For official and current definitions you should always double check your policy wording.

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