Families ‘downgrading’ life insurance policies

Financial hardship is leading Irish families to favour cheaper life insurance policies whose benefits decrease over time but experts warn they may not be suitable for everyone.

Insurance provider Acorn Life has said its advisers throughout the country have noticed a marked increase in the number of people enquiring about the lower cost protection option — a less comprehensive policy that is generally cheaper than a fixed level or indexed policy.

Traditionally life cover is either set at a fixed level or indexed to increase at a modest level for the duration of the plan. Decreasing term protection cover still pays out a lump sum in the event of death and while the premiums are fixed, the sum assured decreases steadily over the term of the policy.