Decreasing Critical Illness insurance policy - what is it all about?

Decreasing critical illness insurance usually comes with decreasing term life insurance. This type of product is used by those who have a mortgage or a high-ticket loan.

When you apply for a mortgage, you will be required to get decreasing term coverage. However, if you really want to make sure that your mortgage is paid, even if you get critically ill, then you can consider adding a decreasing critical illness insurance cover. This can protect your family in case you become critically ill or are diagnosed with a critical illness while the loan is still active but you cannot work and pay off current debts.

Also called a mortgage critical illness cover, the decreasing critical illness cover (as the name suggests) is designed to decrease the level of cover as you pay off your mortgage. When you are diagnosed with a critical illness, the insurance cover will kick in and you can use the proceeds to pay off your mortgage.

This is cover when you need it most – while you need to spend considerable amounts of money in treatments and also have to cover for everyday expenses.

If you are concerned primarily about ensuring that you are still able to pay off your mortgage in the event that you get critically ill, then it is more practical to get a mortgage or decreasing critical illness insurance. For one, this is more affordable than a level critical illness cover since it decreases over time, even as your level of debt also decreases.

Here are some factors that will help you decide if this cover is a good option for you:

Budget. The question is, can you afford to pay for the additional cover? You have to weigh the risks versus the premiums you will have to pay. If you deem that with the risks in your situation, a critical illness insurance policy is necessary, then you can look at how you can cut down on other items just to be able to pay for your premiums.
Family situation. It really depends on whether you are the main provider or if you are a dual-income family. With the former, you cannot afford not to have the coverage since your family depends on you for the money to pay for bills, as well as the mortgage. If both spouses are earning, it may be a lesser risk, but it will still be useful to consider getting the coverage as an additional safety net.
The type of mortgage or debt the insurance should cover. You should look if your mortgage is an interest only mortgage or a reducing mortgage.

As a responsible borrower, it is important for you to explore getting a critical illness insurance policy to ensure that you can cover your debt even when you can’t earn an income (particularly due to a critical illness).

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Type of Insurance
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Over what period?
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Personal Details
Title
First Name
Last Name
Date of birth
Do you smoke?	No Yes
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Is this a joint application?	No Yes
App. 2: Title
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App. 2: Date of birth
App. 2: Do you smoke?	No Yes
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