When looking for mortgage insurance and its confusing when your consultant mentioned level term insurance and decreasing term life insurance. 

In this article, we will expound on the differences, compare them and finally, show you the pros and cons.

Let’s dive in!

What Is Decreasing Term Life Insurance?

Decreasing term life insurance is a term insurance which covers for your housing loan. In short, it is a traditional mortgage insurance policy. 

Why its called a decreasing term insurance then?

When you have a mortgage loan, it will have a loan period (in years) and a loan amount. With these two information, you can set up a mortgage insurance or decreasing term insurance. As you continue to repay the loan, your balanced loan amount will reduce and thus, it make sense for your mortgage insurance’s sum assured to reduce too. 


What Is Level Term Insurance?


Unlike decreasing term insurance which the sum assured will decrease, the level term insurance’s sum assured will be levelled or remain the same throughout the policy term. 

Why should you consider that?

There are a few advantages and they are: 

  1. Additional coverage for your family
  2. Planning to purchase multiple properties in future
  3. Lock in premium to cover for multiple properties’ loan amount
  4. Lock In premium at young age and cheaper price


You might want to know whether: 

Is mortgage insurance compulsory in Singapore? 

What is the difference between mortgage insurance and term insurance

What is Mortgage Reducing Term Assurance (MRTA) in Singapore


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Want To Know More About The Difference Between Level Term and Decreasing Term Life Insurance?

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