Oklahoma Life Producer Practice Exam 2025 – All-in-One Resource to Master Your Certification

A policy that decreases in coverage over time to align with a mortgage balance is identified as a Joint Life Decreasing Term Policy. This type of insurance is designed specifically to provide a death benefit that reduces gradually, typically coinciding with the diminishing balance of a mortgage. As the policyholder pays down their mortgage, the amount of insurance coverage decreases, which can make it a cost-effective solution for borrowers who want to ensure that their mortgage can be paid off in the event of their untimely death.

This type of policy is particularly useful for homeowners, as it provides financial protection for the family or beneficiaries that may be left with the mortgage debt. The relationship between the decreasing benefit and the mortgage balance means that as the liability decreases, so does the premium for the insurance, making it an attractive option for many individuals.

In contrast, the other types of policies mentioned do not have this decreasing feature. A Joint Life Policy typically covers two individuals and pays out upon the death of one of them without any relation to a mortgage. A Whole Life Policy offers a fixed death benefit that does not change over time as premiums are paid, ensuring lifelong coverage and cash value accumulation. An Indexed Universal Life Policy has a flexible premium structure and death benefit but can increase rather than decrease