What kind of life policy typically offers mortgage protection?

Decreasing term life insurance policies are specifically designed to provide mortgage protection. The coverage amount decreases over time, generally aligning with the outstanding balance of a mortgage. As the mortgage balance reduces, the policy's death benefit also decreases, making it a cost-effective way to ensure that the mortgage would be paid off in the event of the policyholder's death. This type of policy is ideal for borrowers, as it provides financial security to their beneficiaries without leaving a large, unneeded death benefit as the mortgage balance diminishes.

Other types of life policies, while they may serve different purposes, do not provide this specific alignment with a mortgage. Whole life policies offer a level death benefit and cash value accumulation, which does not decrease over time. Level term policies maintain a constant benefit for the duration of the policy, without adjustment for diminishing debts. Increasing term policies, on the other hand, increase the death benefit over time, which would not be practical for mortgage protection purposes where a decreasing balance is more relevant.