Which type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual's home

Rationale

Mortgage redemption.

A mortgage redemption insurance policy ensures that in the event of the policyholder's death, the outstanding mortgage debt on their home is fully covered. This type of insurance is specifically designed to protect the individual's family from the burden of mortgage repayments after their passing.

A (Joint life.) YOUR ANSWER

Joint life insurance covers two individuals and pays out upon the death of either person. It is not tailored to match the outstanding debt on an individual's home but rather provides a lump sum payment to the surviving policyholder.

B (Family protection.) YOUR ANSWER

Family protection insurance offers a lump sum payment to the policyholder's family in the event of their death, providing financial support to cover living expenses and other costs. It does not necessarily align with the outstanding debt on the individual's home.

C (Mortgage redemption.) CORRECT

Mortgage redemption insurance is specifically structured to match the projected outstanding debt on an individual's home. This ensures that the mortgage is fully paid off if the policyholder passes away, relieving their family of the financial responsibility associated with the home loan.

D (Level term.) YOUR ANSWER

Level term insurance provides a fixed lump sum payment to the policyholder's beneficiaries if they pass away during the policy term. While it offers financial protection, it does not directly correlate with the outstanding debt on the individual's home.

Conclusion

In the context of insurance policies tailored to address mortgage obligations, mortgage redemption insurance stands out by offering a death benefit that precisely aligns with the projected outstanding debt on an individual's home. This targeted coverage provides peace of mind by ensuring that the family's home remains secure even in the face of unexpected circumstances such as the policyholder's death.

Which type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual's home

Mortgage redemption.

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