Which type of policy is typically used for mortgage protection?

Decreasing term insurance is specifically designed to provide coverage that decreases over time, making it particularly suitable for mortgage protection. As a mortgage is paid down, the outstanding debt reduces, reflecting the decreasing nature of the policy. The death benefit declines in correlation with the mortgage balance, ensuring that in the event of the policyholder's death, the remaining mortgage amount can be paid off, protecting the beneficiary from assuming this financial burden.

In contrast, whole life and universal life insurance policies are designed to provide lifelong coverage with savings components, which do not align with the specific needs of mortgage protection where the liability decreases over time. Variable life insurance involves investment components and allows for policyholders to adjust their premiums and death benefits, but it does not specifically cater to the mortgage reduction aspect that decreasing term insurance addresses. Thus, decreasing term insurance is the most appropriate choice for mortgage protection purposes.