Reducing Term Assurance

• A reducing term assurance is a Term assurance policy where the Sum assured reduces over the Term of the policy.

A reducing term assurance policy is often taken out in connection with a Repayment mortgage and the reducing sum assured is intended to, at any time, be approximately equal to the outstanding capital that would need to be repaid in the event of the borrower(s) death, as long as the monthly repayments have been kept up to date.

The details of term assurance policies vary from insurer to insurer and from policy to policy.