Washington Life Producer Practice Exam

Decreasing term life insurance is often used to?

1. Provide coverage for whole life

2. Cover expenses for final arrangements

3. Provide coverage for a home mortgage

4. Support income replacement

The correct answer is: Provide coverage for a home mortgage

Decreasing term life insurance is specifically designed to provide a death benefit that declines over time, which makes it particularly suitable for covering a home mortgage. As the mortgage balance decreases with each payment made, the coverage provided by a decreasing term policy aligns with this trend, ensuring that there is enough money to pay off the remaining mortgage in the event of the insured's death. This type of policy is often chosen by homeowners because it can offer a cost-effective way to ensure that mortgage obligations do not become a burden on the family or heirs. In comparison, while the other options mention important purposes for life insurance, they are not typically associated with decreasing term policies. Whole life insurance is a permanent type of coverage with a cash value component, final arrangements usually require a fixed amount of coverage not linked to a decreasing value, and income replacement typically relies on level term or permanent life insurance to provide a consistent benefit throughout an individual's working years.