Question

1. a special policy that protects the lender in case the buyer cannot make payments or cannot make them on time.

a) tax insurance (ta)
b) payment insurance (pi)
c) buyer’s insurance (bi)
d) private mortgage insurance (pmi)

Explanation:

The question is about identifying the type of insurance that protects the lender if the buyer fails to make timely payments. Payment Insurance (PI) is designed to cover such situations where a buyer (or borrower) can't make payments, thus protecting the lender. Tax Insurance (TA) is for tax - related risks, Buyer’s Insurance (BI) is more about protecting the buyer, and Private Mortgage Insurance (PMI) is for when a borrower has a low - down - payment mortgage, mainly to protect the lender in case of default but the description here matches Payment Insurance (PI) better as it's about the buyer not making payments on time.

Answer:

B) Payment Insurance (PI)