Invest & Protect LTD
45 Market Street
Wirral
Cheshire
CH47 2BQ
Tel 0845 22 55 191
Fax 0151 632 2117
email:
info@life-ins.co.uk
Office Hours
9am - 5pm
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Decreasing term Assurance (DTA)
This type of insurance is more often used to protect mortgages;
the level of cover will decrease as the term goes by therefore
making it suitable for the likes of repayment mortgages.
There are actually other times that decreasing term insurance
would be used other than a mortgage such as a Gift Inter Vivos
policy: -
This is a type of decreasing term plan that actually reduces at
the same rate as the chargeable inheritance tax on an estate as
a result of a Potentially Exempt Transfer (PET).
For example if you gift part of your estate away before death
then that part is classed as a PET, this means that for a period
of 7 years there could be tax due on the transfer. This amount
of tax reduces by a set amount each year for those 7
The Gift Inter Vivos plan is designed to mimic that reduction to
ensure sufficient money is available to meet the bill if the
person who gifted the estate dies before the end of the 7-year
point.
This type of insurance is very specialised and is used mainly in
good Inheritance Tax Planning (IHT planning).
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