Life insurance vs decreasing life insurance: what's the difference?

Austin is a Junior Content Design at Co-op Insurance

Published 9 November 2026

by Austin Cameron

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If you've just purchased a home with a mortgage, or you've started thinking about how your family would support themselves without your income, then life insurance might be worth considering.

Life insurance covers you for a fixed period of time. This is usually between 10 and 30 years, but could be shorter or longer. If you die or you're diagnosed with a terminal illness whilst you're covered, your loved ones will get a lump sum payment if they make a successful claim.

There are various types of life insurance, so it can be hard to find the one that fits your needs. In this guide, we'll explain the difference between life insurance and decreasing life insurance, to help you understand which might suit your needs.

What is life insurance?

Life insurance, also known as level life insurance or family protection, gives you a fixed amount of protection over a period of time. For example, if you choose £200,000 of cover, the amount stays the same for the length of the policy. People often choose this type of policy if they have family or loved ones who depend on them financially.

The payout could be used to:

  • cover your family's everyday living costs
  • pay off your mortgage or other debts
  • support your children’s education costs

With life insurance your level of cover stays the same over the length of your policy:

Graph illustrating how level cover stays the same over the length of a Life policy

What is decreasing life insurance?

Decreasing life insurance, also known as mortgage protection, is usually taken out when someone buys a home with a repayment mortgage. People usually take out this type of policy if their existing debts are expected to reduce over time.

With this type of insurance, your monthly payments stay the same, but the amount of cover you get reduces over time in line with your mortgage balance. Although the payments stay the same over the policy term, decreasing life insurance is usually cheaper compared to Life insurance.

Interest rates on decreasing life insurance

An interest rate is applied to your decreasing life insurance policy to calculate how quickly your cover should reduce. If your amount of cover reduces more quickly than the balance on your mortgage, the payout may not be enough to repay your mortgage in full. It's important to consider interest rates before buying a Decreasing life insurance policy.

With decreasing life insurance your level of cover reduces over the length of your policy:

Graph illustrating how cover level decreases over the length of a decreasing life policy

Which type could be suitable for you?

The type of life insurance you choose will depend on your circumstances and what you want the payout to help cover. If you just want to cover your existing debts and you expect them to decrease over time, you could consider a decreasing life insurance policy. If you want to cover your debts and support your family or loved ones financially if you die, you could consider a life insurance policy.

Single or joint policy life insurance policies

You can take out a single policy for one person or a joint policy for 2 people. With a joint policy, you can cover yourself and another person, such as your spouse or partner.

If you take out a joint policy with another person and one person dies or becomes terminally ill, there will only be one payout if a successful claim is made. After the payout is made, the second person is no longer covered by the policy. In this situation, it may be worth considering if a new policy is needed.

How do they compare?

Feature

Life insurance

Decreasing life insurance

Cover amount

Stays the same

Reduces over time

Monthly payments

Stays the same

Stays the same

Typical use

Provide broader financial support for loved ones

Protect a repayment mortgage

Cost

Usually higher

Usually lower

Before choosing a policy it's useful to think about:

  • how much cover you may need
  • what you would like the payout to be used for
  • how long would you like the cover to last
  • who you want the policy to cover

How Life Insurance from Co-op could help

At Co-op Insurance, we offer two types of policies provided by L&G:

  • Life Insurance
  • Decreasing Life Insurance

These policies include access to telephone-based wellbeing support and a confidential care concierge service.

Find out more about these policies and explore your life insurance options with Co-op.

Exclusive offers for Co-op Members

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£140 welcome gift

Life insurance

Members get a welcome gift worth £140 when they take out a new life insurance policy. Members also get 5% off the cost of their life cover for the duration of the policy.

You will receive your gift after 6 months of regular payments. Offer ends 30 November. Terms and conditions apply.

Get a life insurance quote
A grandmother sat with her family on the sofa.
£140 welcome gift

Over 50 life insurance

Members get a welcome gift worth £140 when they take out a new over 50 life insurance policy. Members also get an extra 1% added to their over 50 payout.

You will receive your gift after 6 months of regular payments. Offer ends 30 November. Terms and conditions apply.

Get an over 50 life insurance quote
Welcome gift terms and conditions

The offer

If you are a new life or over 50 life insurance customer through Co-op, you will get a welcome gift. 

Your policy needs to run for at least 6 months, and your payments must be up to date. 

This offer is for new customers only. 

You cannot get this offer if you already have a life or over 50 life insurance policy of the same type, or if you cancelled one in the last 18 months.

What you’ll get

  • £100 welcome gift for all new customers, or 
  • £140 welcome gift for matched Co-op Members who buy during our exclusive member offer events. This replaces the £100 gift.

Exclusive member offer events dates:

  • 1 October to 30 November 2025 
  • 31 December 2025 to 28 February 2026
  • 1 September 2026 to 30 November 2026

Your welcome gift options

If you buy over 50 life insurance through Co-op, you can pick one of these:

  • Amazon.co.uk Gift Card (restrictions apply, see amazon.co.uk/gc-legal)
  • Argos eGift Card
  • Cheque

If you buy life insurance through Co-op, you can pick one of these:

  • Amazon.co.uk Gift Card (restrictions apply, see amazon.co.uk/gc-legal)
  • Love2shop eGift Card
  • Cheque 

Promoter

The promoter is Co-op Insurance, a trading name of Co-op Insurance services Limited; registered in England and Wales with registration number 4390. Registered office: 1 Angel Square, Manchester, M60 0AG. Co-op Insurance Services Limited is authorised and regulated by the Financial Conduct Authority under register number 779364 

This promotion is provided and managed on the Promoter’s behalf by The Marketing Lounge Partnership Limited ('MLP'), (Company number 06467245) of The Cow Shed, Walnut Tree Farm, Lower Stretton, Cheshire, United Kingdom, WA4 4PG 

Member data matching criteria

To establish you as a Co-op Member, the information on the purchase date of your new life insurance policy direct with Co-op, must match the information on your Co-op membership account. It is your responsibility to ensure that these records match and are up to date. We accept no responsibility or liability for the non-application of the offer where inaccurate or incorrect information is provided. The matching process uses the following data: 

  • your date of birth, and
  • your surname and
  • your first initial of your first name 

You can become a Co-op Member before or on the same day that you buy your new policy.  A £1 membership joining fee and Membership terms and conditions apply.

Notification and application of the offer

  • There is no requirement to enter a promotional code when purchasing a life insurance policy. 
  • Only one welcome gift per eligible policy bought, which will be subject to their own terms and conditions. You will be given access to their website with all the relevant details once you become eligible and are offered the option to choose your gift. 
  • Eligible policies bought in conjunction with other Co-op Insurance member discounts or exclusive offers will still be eligible for this Offer. 

How to redeem

  • If you're eligible, you'll receive a 'How to claim' email within 15 days after your policy has been active for 6 months. It will include details about the offer, how to choose and claim it, and the terms and conditions. We will send it by email or letter, depending on the information you provided when you took out your policy. 
  • You will have 30 days from the date you receive the message to choose which offer you would like. If you haven’t made your choice within the first 15 days, we will send a reminder message by email or letter to let you know you have 15 days left. 
  • If you are eligible for the welcome gift, the message will direct you to a website run by MLP, where you can choose your offer. 
  • After you’ve made your choice, if you choose a gift card, you will see a page with your digital gift card and details on how to use it, including expiry information. If you choose the cheque option, it will be sent to you by post. Cheques are usually delivered within 15 working days. Sometimes due to postal delays this can take longer.

Additional terms

  • The Offer has no cash value and cannot be exchanged for cash, or an alternative choice. 
  • The terms and conditions of this Offer do not alter or vary the terms and conditions of any eligible policy bought. 
  • Any applications for an eligible policy are subject to normal terms and conditions including underwriting criteria. 
  • Fraud and abuse relating to the Offer may result in the forfeiture of the welcome gift and termination of your insurance policy. 
  • The sourcing and delivery of the offer will be fulfilled by The Marketing Lounge Partnership Limited (MLP) of The Cow Shed, Walnut Tree Farm, Lower Stretton, Cheshire WA4 4PG on behalf of Co-op Insurance. MLP are, as defined in the General Data Protection Regulation ((EU) 2016/679), the Data Processor and Co-op Insurance will be required to pass some of your personal information to The Marketing Lounge Partnership to fulfil the Offer. By accepting the Offer, you agree to give consent for this information to be shared. 

You must notify us if there are any issues with receiving your offer within 12 months of your policy start date. Where you fail to contact us within this time, we may in our absolute discretion refuse to fulfil the offer without liability to you.

Exclusions

  • This Offer is for new life or over 50 life insurance customers bought through Co-op only. 
  • Policies bought via price comparison websites or cashback sites are not eligible for this offer. 
  • Temporary Co-op Membership cardholders are excluded from the £140 offer 
  • If your policy is cancelled within 6 months of the policy start date, for any reason, you will not be eligible to receive the Offer. 
  • The underwriter reserves the right to decline any application for any insurance policy at its absolute discretion and is not obliged to disclose any reason for rejection. 

Cancellation or withdrawal

Co-op Insurance reserves the right to withdraw, modify or end this Offer, without notice, in whole or in part in the event that it is necessary to do so, or if the uptake of the Offer exceeds expectations. 

Changes to these terms and conditions

  • We reserve the right to amend these terms and conditions at any time. Revised terms and conditions will be available at coop.co.uk/life-offer. It is your responsibility to keep up to date with any such changes. 
  • If any paragraph in these terms and conditions is found by any court or administrative body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other paragraphs of these terms and conditions, which shall remain in full force and effect. 

Relevant law

  • These terms and conditions shall be governed by and construed in accordance with the laws of England and Wales. 
  • The Courts of England and Wales shall have exclusive jurisdiction in connection with these terms and conditions.