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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We believe in providing adequate information for the public to share the importance of financial planning in Singapore

We used various products including life insurance, whole life insurance, endowment planscritical illness insurance, hospitalisation insurance and many more to solve your financial concerns. 

Additionally, we also provide services like will writing, legacy planning, retirement planning and estate planning in Singapore

 

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

If you would like to know more about the difference between level term and decreasing term insurance, you may contact us at (+65) 9380 2839 or you can click on the button below to enquire about the different financial services that we provide.

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