Which type of insurance repays a mortgage in the event of the owner's death?

Mortgage protection insurance is specifically designed to repay the outstanding mortgage balance in the event of the policyholder's death. This type of coverage offers peace of mind to homeowners, ensuring that their family will not be left with the financial burden of repaying a mortgage if they pass away unexpectedly. The insurance pays out a sum that corresponds with the remaining mortgage debt, thereby facilitating the preservation of the family home.

In contrast, while family income benefit provides an income to beneficiaries upon the policyholder's death, it does not specifically address mortgage repayments. Level term assurance pays out a fixed sum upon death within a specified term but does not adjust with the mortgage balance. Whole life insurance, on the other hand, offers coverage for the entirety of the policyholder's life and provides a cash benefit to beneficiaries but might not explicitly cater to the mortgage debt repayment needs like mortgage protection insurance does. This creates a clear distinction in the purpose and functionality of these products.