What is a primary advantage of decreasing term assurance?

The primary advantage of decreasing term assurance is that it is generally less expensive compared to other types of life insurance policies. This cost-effectiveness arises because the sum assured decreases over time—typically in line with a repayment schedule of a loan, such as a mortgage. As the death benefit declines, the insurer's risk diminishes, which allows for lower premiums.

Decreasing term assurance is often favored by those who want to ensure that specific debts or financial obligations are covered, particularly as they pay down those obligations. Since the coverage is tailored to fit the decreasing need for insurance as debts are repaid, this insurance approach is not only budget-friendly but also aligns with the life stages of many policyholders who might be seeking financial protection in a targeted manner.

In contrast, while flexibility in premiums or higher payouts might appeal to some, those features do not define the essence of decreasing term assurance. Additionally, the fact that it only covers a set period is a characteristic of this type of insurance rather than an advantage.