Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
A client wants life insurance that matches a declining mortgage balance, with the death benefit shrinking as the loan is paid down. Which policy best fits?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Decreasing term insurance features a level premium with a death benefit that declines over time, typically to mirror a mortgage or other installment debt. If the insured dies early, the family receives enough to pay off the loan; as the balance shrinks, so does the exposure. It is a low-cost way to cover a shrinking obligation.
Why the other options are wrong
- B) Whole life provides a level, permanent death benefit with cash value — it does not decline with a mortgage.
- C) Universal life offers flexible premiums and adjustable coverage, not an automatic decline tied to loan balances.
- D) Guaranteed issue whole life is a small permanent policy issued without medical questions — unrelated to matching a debt schedule.
Memory hook
Decreasing term = the death benefit and the mortgage race each other to zero. The family is never stuck with a half-paid house.