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7. Danielle, age 42, requires $120,000 of life insurance to pay the capital gains tax at her death on her cottage and the income tax
7. Danielle, age 42, requires $120,000 of life insurance to pay the capital gains tax at her death on her cottage and the income tax on her RRSP, both of which will pass to her children. She expects the values of both assets and the associated tax liability to increase in the future, but does not know at what rate. She needs a solution that is flexible enough to accommodate such changes. Because Danielle is self-employed and her income can vary significantly from year to year, she would prefer not to lock herself into a rigid premium schedule. Which of the following permanent life insurance products would best suit Danielle's needs? (A) Term to 100. (B) Universal life. (C) Whole life non-participating. (D) Whole life participating, D. Focus da)
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