Remember how term insurance acts like a “money twin” to replace your income if something happens to you? Well, as you get older, your financial responsibilities might change—and so could your insurance needs.
When you’re younger, you might have big expenses like a home loan EMI, kids to support, or less savings. That means you need a higher cover to protect your family from the financial burden if you’re not around. But as your kids grow up and start earning, your loans get paid off, and your savings grow, the financial pressure on your family reduces.
Because of this, some insurers offer a “decreasing cover” option where your sum assured reduces over time, and so do your premiums. This can help lower your yearly payments as your financial obligations shrink.
However, predicting your future money needs isn’t always easy. Unexpected expenses or changes can arise, making a smaller cover risky. So, if you choose a decreasing cover plan, be very sure that your future financial needs won’t suddenly require a large payout.
In short, decreasing cover can be good for some, but make sure it fits your long-term financial picture before deciding. Planning carefully ensures your loved ones stay protected throughout your life’s stages.