Level, decreasing and increasing life insurance: what's the difference?
Level term life insurance pays a fixed amount if you die during the policy term. Decreasing term cover reduces over time, often in line with a repayment mortgage. Increasing cover rises each year to help keep pace with inflation. Your policy schedule shows which type you have and how the cover amount changes.
Level term cover
The amount of cover stays the same throughout the term. It is often used to provide a lump sum for a family or to repay an interest-only mortgage. Because the sum does not rise, its real value falls over time with inflation.
Decreasing term cover
The cover amount reduces over the term, usually designed to broadly follow the balance of a repayment mortgage. It is generally cheaper than level cover. If your mortgage changes, for example after a remortgage or extra borrowing, the cover may no longer match what you owe.
Increasing term cover
The cover amount rises each year, either by a fixed percentage or in line with an inflation measure, and premiums normally rise too. Some policies call this indexation and let you decline an increase, which may affect future increases.
Which one do I have?
Your policy schedule shows the type of cover, the starting amount and how it changes. If you are unsure whether it still fits your mortgage or family needs, a review with your adviser can help.
This article is general information about UK protection insurance, not personalised financial advice. Policy terms vary between insurers and products, so always check your own policy documents.
Last updated 27 October 2026