Final answer:
A 30-year decreasing term life insurance policy is best suited for paying off the outstanding balance of a 30-year mortgage in the event of the insured's death. Hence, the correct answer is option C.
Step-by-step explanation:
The type of life insurance policy that is best suited for paying off the outstanding balance of a 30-year mortgage in the event of the insured's death is 30-year decreasing term.
A 30-year decreasing term life insurance policy is designed to align with the decreasing balance of a mortgage over time. As you pay off your mortgage, the death benefit of the insurance policy decreases.
This type of policy ensures that the remaining mortgage balance is covered in the event of the insured's death, providing financial protection to the insured's loved ones and preventing them from being burdened with the outstanding mortgage debt.