Decreasing vs level term insurance comes down to what the payout does. A level policy pays the same sum whenever a valid claim is made during the term; a decreasing policy pays less as the years pass, usually following a repayment mortgage down. Aviva, Legal & General and Scottish Widows say the premium on either type stays the same through the term (Aviva and Legal & General add: unless you change the policy), and several insurers say decreasing cover usually costs less.
Wondering what each type would cost against your own mortgage? An FCA-authorised broker can price both types on your loan balance and term at no cost; request a ring-back using the form on this page. Whether you buy is up to you.
How do level and decreasing term compare side by side?
Each cell gives one insurer's own wording, with its document and date.
| What is compared | Level term | Decreasing term |
|---|---|---|
| Payout over the term | Aviva's Life Insurance Plan conditions (DA03011, May 2023): the cover amount stays the same throughout the policy term | The same conditions: the cover amount falls every month, broadly in line with a repayment loan such as a mortgage, on a fixed interest rate of 8% |
| Premium during the term | Scottish Widows' policy summary (61041 01/26): for either type, what you pay each month stays fixed for the life of the policy | |
| Which usually costs more | Legal & General's guide to types of cover (19 June 2026) lists as a drawback that it can cost more than an equivalent decreasing policy | The same guide lists as a benefit that it will generally be cheaper than a comparable level policy |
| Rate that sets the falling sum | Legal & General's terms (QGI12849, October 2026): with level cover the amount of cover stays the same unless you change it | Aviva: a fixed 8%. Scottish Widows' summary: you choose a fixed rate between 0% and 18%. Legal & General's terms (QGI12849, October 2026): the rate is shown on your Policy Schedule |
| Mortgage each is described as suiting | LV='s guide (29 July 2026): "May suit interest-only mortgages, where the amount owed does not reduce." | The same guide: "May suit repayment mortgages, where the amount owed usually reduces over time." |
| What each is often used for | LV= says: protecting family finances, replacing income or leaving a fixed lump sum | LV= says: covering a repayment mortgage or a debt that reduces over time |
Legal & General says decreasing term is sometimes known as mortgage life insurance; what mortgage life insurance is covers the name, and the two types have a page each: level term and decreasing term.
How does each payout behave across the term?
On a level policy the figure on the schedule is the figure paid, whenever in the term a valid claim falls. Royal London's customer brochure for plans sold through an adviser (August 2026) says the same of its level lump sum, however much time passes before a claim. What that sum buys can change: Aviva's life insurance page (September 2026) says a level lump sum will be worth less over time because of inflation, which is the gap that increasing term cover is built for.
On a decreasing policy the payout depends on when the claim falls. Scottish Widows gives an illustration, not a price: with a 25-year policy, a mortgage rate of 8% and £100,000 of cover, a claim at 15 years on decreasing cover would pay £63,206, against £100,000 on level cover. LV= says the amount keeps reducing until it reaches zero by the time the policy ends, so a claim near the end pays little.
The premium does not fall alongside the payout: Legal & General's guide says that while decreasing cover reduces, the premiums stay the same. Both types stop at the end of the term, and how term life insurance works covers claims and exclusions that apply to either.
What interest rate does decreasing cover assume, and what if your mortgage rate is higher?
The falling sum follows a rate written into the policy, not your lender's statements, and insurers differ on who sets it. Aviva's May 2023 conditions fix it at 8%; its life insurance page (September 2026) links them as the plan's terms, but check the terms that come with your quote. Scottish Widows lets you choose a fixed rate between 0% and 18%. Legal & General applies a rate that, its terms say, estimates what you repay each month on a repayment mortgage, and shows it on your Policy Schedule when the policy starts. Royal London's brochure says the amount your cover falls by each year can be based on the current interest rate on your mortgage.
Each insurer also says what follows if your mortgage rate ends up above the policy's. Legal & General's terms (October 2026) put it this way:
If the interest rate we apply is less than the interest rate that is actually applied to your repayment mortgage, or your mortgage changes, the amount we pay out may not be enough to repay your mortgage in full.
Its guide (27 July 2026) adds a check: the rate on the policy should be "equal to or higher than" the rate on the mortgage. Royal London's brochure (August 2026) words the same risk like this:
But you should bear in mind that if your mortgage interest rate increases, the value of your cover may not be enough to pay off your mortgage if you do have to make a claim, so you should review this regularly.
Aviva's guide (December 2025) makes the same point, and Scottish Widows puts a mortgage rate climbing above the policy's chosen rate first in its list of cases where a claim might not clear the loan.
On any decreasing quote, set the rate it assumes beside the rate on your mortgage offer, and look again after a remortgage; changing a mortgage protection policy explains what insurers allow. If you would like a second pair of eyes on those two rates, a broker can weigh the policy rate against your lending rate with you on a free call, arranged through the form on this page.
Which costs more, level or decreasing term?
The insurers quoted here agree on direction. Legal & General, Aviva, Royal London and LV= each say decreasing cover usually, generally or tends to cost less than level. LV= ties it to the payout: decreasing premiums are usually lower "because the payout reduces over time." The direction is not a price. How wide the gap is depends on age, health, smoking, the amount and the term, and what decreasing term cover costs sets out what moves it.
A lower premium sits beside a payout that shrinks, so the comparison is two things at once. To see both, ask for each type on the same starting sum and term; a broker reached through this page can put the two quotes together for you.
Which fits a repayment mortgage, an interest-only mortgage or family living costs?
For a repayment mortgage, Royal London's brochure says a decreasing sum "might be useful if you want the amount of your cover to decrease in line with the balance outstanding" on that mortgage. A level policy can protect a mortgage too, Legal & General notes, but it is built for a broader spread of outgoings. Aviva's guide (December 2025) says decreasing cover may make more sense where the main worry is a repayment mortgage or another debt that shrinks over time.
With an interest-only mortgage the capital stays owed until the end, so the pointers reverse. That guide treats decreasing cover as a product for repayment borrowing, since it would not leave enough to clear a big capital sum at the end of the term, and it calls level cover a good option for interest-only borrowers. Scottish Widows' consumer page pairs level cover with interest-only lending in the same way. Where one loan mixes both repayment methods, how cover might be arranged for it is something to raise with the broker when they ring, free of charge.
For family living costs, the same guide says level cover could be the better fit where the aim is a fixed lump sum towards general living costs, childcare or supporting the people who rely on you, and LV= describes level cover as often used for replacing income. A lump sum is not a monthly income, though, and family income benefit against level life insurance sets a level sum beside cover that pays out monthly.
Nor do you have to pick only one. Holding both is not uncommon, the guide says, with one clearing the mortgage and the other leaving a lump sum for living costs, though that means two policies. If the mortgage is already cleared, life insurance after the mortgage is paid off covers what is left to weigh.
What questions sort one type from the other?
These are the points the insurers' own documents raise, set out as questions rather than an answer for you:
- Is the loan repayment, interest-only, or a mix of both?
- Does the rate on the policy sit at or above the rate on your mortgage, as Legal & General says it should?
- Does the policy term match the mortgage term? Scottish Widows lists a mismatch among the cases where the payout might fall short.
- Do the household's costs run beyond the loan, such as childcare and bills?
- How much weight do you give a sum that stays certain, against a lower starting premium on a sum that falls?
For more on lining quotes up, see comparing mortgage life insurance quotes, and the mortgage life insurance calculator guide covers the size of the starting sum. Related pages on loans and cover are collected in our mortgage cover guide.
Frequently asked questions
What is the difference between increasing and decreasing life insurance cover?
Legal & General's guide (27 July 2026) says decreasing cover reduces over time, while with increasing cover "the opposite is true": the amount is reviewed against inflation, or a fixed rate, and rises. Royal London's brochure adds that premiums on an increasing lump sum also go up; increasing term life insurance has the detail.
What does MoneySavingExpert say about level and decreasing cover?
MoneySavingExpert's mortgage life insurance guide (updated 28 July 2026) says decreasing cover is usually cheaper, that a level-term policy might already cover a mortgage if the payout and term are long enough, and that decreasing cover suits a repayment mortgage only. Those are MoneySavingExpert's own views, not an insurer's terms.
Can a couple use either type on a joint mortgage?
Aviva's Life Insurance Plan summary (May 2023; check the terms with your quote) says the plan can cover one person or two people, and that it will only pay out once. Who is left with what after a first claim on a decreasing joint policy is on joint decreasing term life insurance.
Ready for figures on your own mortgage? A broker can ring you, free, to set prices for both types side by side when your request arrives from the form on this page; what you do next is your decision.
Sources
- Aviva Life & Pensions UK Limited, Life Insurance Plan Policy Conditions (DA03011 05/2023), read 22 October 2026. static.aviva.io
- Aviva Life & Pensions UK Limited, Life Insurance Plan Policy Summary (DA03008 05/2023), read 22 October 2026. static.aviva.io
- Aviva, Life insurance (direct product page, WC05632 09/2026), read 22 October 2026. aviva.co.uk
- Aviva, Level term vs decreasing term life insurance (last updated 8 December 2025), read 22 October 2026. aviva.co.uk
- Legal & General, Types of life insurance (19 June 2026), read 22 October 2026. legalandgeneral.com
- Legal & General, Is Decreasing Life Insurance worth it? (27 July 2026), read 22 October 2026. legalandgeneral.com
- Legal and General Assurance Society Limited, Life Insurance - Policy Terms and Conditions (QGI12849, October 2026), read 22 October 2026. legalandgeneral.com
- Scottish Widows Limited, Scottish Widows Protect Personal Protection Policy Summary (61041 01/26), read 22 October 2026. adviser.scottishwidows.co.uk
- Scottish Widows, Life cover (consumer page, undated), read 22 October 2026. scottishwidows.co.uk
- LV=, Level or decreasing life insurance: What's the difference? (last updated 29 July 2026), read 22 October 2026. lv.com
- Royal London, Cracking good cover: Protection, Personal Menu (August 2026, P9B0098/19; customer brochure for plans sold through a financial adviser), read 22 October 2026. royallondon.com
- Royal London, Life insurance (consumer page, undated), read 22 October 2026. royallondon.com
- MoneySavingExpert, Mortgage life insurance: decreasing term life insurance (updated 28 July 2026; read in a Wayback Machine capture of 25 September 2026). web.archive.org