Decreasing term life insurance is life cover for a fixed number of years whose payout falls as the policy runs, while the premium stays the same. The insurers quoted below describe it as cover for a repayment mortgage, whose balance also shrinks. Want it checked against your own loan? The form on this page leads to a phone call with an FCA-authorised broker about it. It costs nothing, and buying afterwards is up to you.

This page is about decreasing term as a product: what falls, by what rule, and what the policy documents of Legal & General, Aviva and Scottish Widows say about it.

What does decreasing term life insurance mean, and which part falls?

It is term cover: it pays a lump sum if the person insured dies, or is diagnosed with a terminal illness that meets the insurer's definition, before the end date, and when the term ends the cover simply stops (what happens at the end of a decreasing policy). What makes it decreasing is the amount. Legal & General's guide to types of life insurance (19 June 2026) says that "Decreasing term life insurance, sometimes known as mortgage life insurance, means your cash sum decreases roughly in line with the way a repayment mortgage decreases, though the premiums stay the same unless changes are made to the policy."

So the part that falls is the cover amount (the sum assured), not the premium and not the term. Scottish Widows' life cover page puts both halves in one line: the cover you pick gets smaller every month, and the premium does not change. Royal London's consumer page (undated, copyright 2026) adds that "Premiums tend to be lower than level term polices", and Legal & General and Aviva also say decreasing cover usually costs less than level. That is direction, not a price: decreasing term life insurance cost explains what moves it.

You may also see it called reducing term cover; "credit life" is an American term. For a sum that stays put, see level term, or decreasing against level side by side. Whether family income benefit decreases is answered in family income benefit, and claims and exclusions on any term policy are in how term life insurance works.

How is the falling cover amount calculated?

All three insurers run the sum down on an interest rate set in the policy, rather than following your actual mortgage balance. Scottish Widows' Protect policy summary (January 2026, the version for all customers except those using an aggregator) says:

The amount you are covered for will decrease slightly each month in a similar way to the amount owed on a standard repayment mortgage. You can choose a fixed rate of interest between 0% and 18%. To work out the rate of decrease, we’ve assumed a set mortgage rate of 8% a year.

Its own illustration, not a price: "In this example, we’ve assumed: the policy will end after 25 years the mortgage interest rate is 8% the cover amount is £100,000 If, at 15 years, someone with decreasing cover were to die or be diagnosed with one of the illnesses you are covered for, we’d pay out £63,206. For a policy with level cover we’d pay out £100,000."

Aviva's Life Insurance Plan conditions (DA03011 05/2023) fix the rate: "The cover amount decreases every month, broadly in line with a repayment loan, for example a mortgage, using a fixed interest rate of 8%". Despite their date, Aviva's life insurance page (footer WC05632 09/2026) still links them as its current terms. Legal & General's Decreasing Life Insurance page (reviewed 1 June 2026) says the rate it applies "will be shown in your Personal quote or the Policy documents".

That is also how a decreasing term calculator estimates the cover at a future date. Legal & General's terms (QGI12849, October 2026) say the rate is meant to estimate your monthly repayment on a repayment mortgage, so the cover roughly tracks what would be owed on a repayment loan of the same size, term and rate. Change any of the three inputs and the curve changes, which is why the year-by-year fall differs from policy to policy. You do not have to work it out yourself: Aviva's conditions say the policy schedule shows "your cover amount will be at each policy anniversary date". The mortgage life insurance calculator guide deals with the separate question of how big the starting sum should be.

What if your mortgage rate is higher than the policy's rate?

Then the payout may not be enough to clear what you still owe. Scottish Widows lists four situations in which "what we pay out might not be enough to pay off what you owe on your mortgage", the first being "your mortgage interest rate goes above the rate of interest you choose for your policy". The others are borrowing more than the cover amount, a policy period that "doesn’t match the term of the mortgage", and repayments that "go in to arrears".

Legal & General's guide lists the same risk as a drawback, telling buyers to keep an eye on whether the rate on their mortgage climbs above the one the policy uses. Its product page adds that your "policy may not completely pay off your outstanding mortgage unless you make sure your cover amount is adjusted to match any new mortgage arrangements." Aviva's summary says: "You need to regularly review the cover you’ve got to make sure it meets your needs." In practice that means setting the policy's rate beside the rate on your mortgage offer, and looking again after a remortgage.

What is decreasing term life insurance used for?

Mainly a repayment mortgage; Scottish Widows sets it against level cover for an interest-only loan. Scottish Widows says decreasing cover "would typically be chosen to protect a repayment mortgage", and its consumer page says its options "include decreasing cover, which can help pay off a repayment mortgage, or level cover to help with an interest-only mortgage." Aviva's page describes it as something to choose "to help your loved ones pay off a repayment mortgage or long-term loan", and Legal & General presents its own policy as a way to help protect a repayment mortgage.

Legal & General adds that "If you need to cover more than a repayment mortgage, remember that the payout will decrease over time". If you are not sure a mortgage needs covering in the first place, start with whether a mortgage needs life cover.

If your loan is part repayment and part interest-only, or you cannot tell which cover matches it, tell the broker once your details from the form on this page reach them. They can explain how different insurers would set the policy up; no broker can promise acceptance.

Couples buying together can take it out on two lives: Aviva's summary says the plan can be written on one life (single) or on two (joint), and pays out only once either way. What the survivor is left with is on joint decreasing term life insurance. Legal & General lets you include Critical Illness Cover, at extra cost, when you first buy its decreasing policy, and mortgage protection with critical illness cover explains what remains after a claim on that.

Frequently asked questions

Is decreasing term life insurance still available?

Yes. Aviva lists "level cover and decreasing cover" as its two types of term cover, Scottish Widows offers decreasing cover on its Protect policy, and Legal & General sells Decreasing Life Insurance as its own product.

Why is my life insurance cover decreasing?

If your policy is decreasing term, that is how it is built: the cover amount falls over the term on the interest rate fixed in the policy. If you are not sure that is the type you chose, check your policy schedule or ask the insurer.

Can the policy be changed if I move house or remortgage?

Possibly. Legal & General lists "increase or decrease the amount of cover" among the changes you can request, and says "These changes could affect the premiums that you pay". Aviva's summary says you can split a joint policy if you "rearrange your mortgage into one name".

To see how a decreasing policy would sit against your own mortgage, you can start with the enquiry form on this page and take the call from an FCA-authorised broker that follows. The related pages are collected in the mortgage cover guide.

Sources

  • Scottish Widows Limited, Scottish Widows Protect Personal Protection Policy Summary (61041 01/26; the version for all customers except those using an aggregator), read 18 October 2026. adviser.scottishwidows.co.uk
  • Scottish Widows, Life cover (consumer page), read 18 October 2026. scottishwidows.co.uk
  • Aviva Life & Pensions UK Limited, Life Insurance Plan Policy Conditions (DA03011 05/2023; linked from Aviva's direct life insurance page as current terms), read 18 October 2026. static.aviva.io
  • Aviva Life & Pensions UK Limited, Life Insurance Plan Policy Summary (DA03008 05/2023; linked from the same page), read 18 October 2026. static.aviva.io
  • Aviva, Life insurance (direct product page, WC05632 09/2026), read 18 October 2026. aviva.co.uk
  • Legal and General Assurance Society Limited, Life Insurance - Policy Terms and Conditions (QGI12849, October 2026; Legal & General's own document, no partner named), read 18 October 2026. legalandgeneral.com
  • Legal & General, Decreasing Life Insurance (reviewed 1 June 2026), read 18 October 2026. legalandgeneral.com
  • Legal & General, Types of life insurance (19 June 2026), read 18 October 2026. legalandgeneral.com
  • Royal London, Life insurance (consumer page, undated, copyright 2026), read 18 October 2026. royallondon.com