Which policy insures the quality and priority of the lien of an insured mortgage?

The correct choice highlights the purpose of a Loan Policy. This type of title insurance specifically protects lenders from loss due to defects in the title that may affect the priority of their mortgage lien. When a lender issues a loan for property, they require assurance that their mortgage lien is legally valid and that it holds the proper priority over any other liens or claims against the property. A Loan Policy insures that if any issues such as undisclosed liens, fraud, or errors were to surface, the title insurer would cover the losses incurred by the lender.

In contrast, while a Standard Policy or a Title Policy covers general title-related issues for property owners or buyers, these do not specifically address the needs of lenders concerning the lien priority and quality of the mortgage itself. A Coverage Policy is a less common term in the context of title insurance and does not specifically pertain to mortgage lien protectiveness. This focused protection is crucial for financial institutions since they need to mitigate risks associated with their investments in real estate.