The choice
Level term or decreasing term
Decreasing term. The sum insured reduces roughly in line with a repayment mortgage. It is the cheaper option and it suits a repayment mortgage well, because the debt is falling too.
Level term. The sum insured stays the same throughout. It costs more but leaves something over and above the mortgage, and it is the right choice alongside an interest only mortgage where the balance never falls.
Structure
Joint policy or two single policies
A joint policy is usually slightly cheaper, but it pays out once and then ends, leaving the survivor with no cover at an age when new cover costs considerably more.
Two single policies cost a little more but pay out twice if both die, and each person keeps their own cover if the relationship ends. For most couples we would rather talk this through than default to the cheaper option.
Extras
What is often included
Worth knowing what you already have before buying more.
- Terminal illness benefit, usually included at no extra cost
- Waiver of premium, which keeps the policy going if you cannot work
- The option to increase cover later without new medical questions
- Separate cover for children on some policies
Cover is subject to underwriting. A policy will not pay out if premiums are not maintained.