Decreasing Term Assurance & Critical Illness Cover
What is Decreasing Term Assurance (DTA) & Critical Illness Cover (CIC)?
Decreasing Term or Mortgage Protection policies as they are often known, provide cover that matches the outstanding balance of your mortgage/loan and will pay a lump sum that can be used to pay off the remaining balance of your mortgage/loan in the event of death and/or diagnosis of a critical illness.
Premiums can be guaranteed throughout the term or reviewable at certain intervals, but should you survive the policy term, there will be no benefit. As this type of contract only provides cover in the event of death and/or diagnosis of a critical illness there is no surrender value, so if you stop paying the premiums at any time, your cover will cease.
Decreasing Term Assurance (DTA)
Essentially, term assurance is the cheapest type of life cover and is normally used for the benefit of the life assureds’ family or business, but it does have limitations.
As it has a fixed term, there is no flexibility and you will be unable to increase cover or extend the term. Should your health have deteriorated during the term of the policy, you may be unable to obtain further life cover at the end of the term.
Critical Illness Cover (CIC)
A Critical Illness plan is designed to pay out a lump sum if you are diagnosed as suffering from any of the specified critical illnesses but survive for a period of time after diagnosis (normally 28 days). The lump sum could be used to pay for things like nursing care, home help, adapting your house to accommodate a disability, for a holiday to recover from treatment, but in this case, paying off your mortgage.
Find out more in our Decreasing Term Assurance (DTA) And Critical Illness Cover (CIC) Guide's
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