Final answer:
For Julie's need to cover a 30-year mortgage upon death, Decreasing term insurance is the apt choice as the benefit decreases over time, aligning with the mortgage balance. Other insurance types don't specifically cater to decreasing mortgage balances, making them less suitable for this specific need. Option 2 is correct answer.
Step-by-step explanation:
If Julie has a $100,000 30-year mortgage on her new home and is seeking life insurance to pay off the loan balance in the event of her demise within the 30-year period, the most suitable type of life insurance would be Decreasing term insurance.
This type of insurance has a decreasing death benefit that matches the declining balance on a mortgage, and premiums generally remain fixed over the term of the policy. As time goes on and the mortgage balance decreases, the potential payout from the insurance also decreases, which can result in lower insurance costs when compared to other types of life insurance.
Other options like adjustable life insurance, increasing term insurance, and modified life insurance are not specifically designed to match the decreasing balance of a mortgage over time. For example, increasing term insurance is the opposite of what Julie needs as it involves an increasing death benefit, while adjustable life insurance offers more flexibility but not necessarily alignment with mortgage payoff needs and modified life insurance may offer adjustments to premium or benefits but again is not specifically tied to a mortgage balance.
The correct option for Julie to purchase with the purpose of covering her mortgage in the event of death within the 30-year period is Decreasing term insurance.