John , 42 works as a Consultant in the field of computer animation . He earns $ 140,000 per year in gross . John's wife , Sandra , 43 , owns and operates a home based , incorporated business in architectural design . She draws an after - tax income of $ 80,000 per year . The couple has a $ 92,308 mortgage , with five years remaining on the amortization . The couple plans to apply their mortgage payments to their retirement savings . The couple has six - year - old twins , Amanda and Alex . At birth , the couple set up a Universal life insurance policy worth $ 200,000 on John's life , paid up to age 65. According to their insurance agent , it would build up a cash surrender value that could be used for emergency purposes , or to supplement their incomes in retirement . John also obtained a disability insurance policy that would pay a tax - free benefit of $ 1,500 a month , enough to cover the mortgage payment at the time . The only insurance coverage Sandra has is extended health benefits that she and John have through a personal health plan . Should John or Sandra die prematurely the survivor would need to maintain the family income to continue funding important plans , such as Registered Education Savings Plans ( RESPs ) and Registered Retirement Savings Plans ( RRSPs ) . The survivor would also want to consider taking a one - year leave of absence under the circumstances . Such income will be required until John is 65. Any insurance proceeds could be invested in a balanced portfolio ( 50-50 split between equities and fixed income ) at an expected return rate of 1.5 percent after fees. John and Sandra would like to ensure that, if they experience a similar situation, the supporting spouse could take up to two years off to help the other; they would also like to have $100,0 set aside for home renovations , if needed. They figured that in case of sudden death, they dont have immediate funds and would need $25,00 for funeral. They would like to know where their risks lie and learn about potential solutions . Sandra is the only child of her parents . Her parents have been inherited a cottage the lakeside from their parents . The cottage is currently valued at $350,000. Her parents would like Sandra and her family to continue enjoying the cottage even when they have died. Which of the following is a better option?

a) Get an life insurance on the lives of her parents for an amount sufficient to pay income taxes payable upon death so that funds are available to pay off the taxes and she does not have to sell the cottage .

b) Ask her parents to add her as a joint owner. Since she is a family member, no taxes would be payable upon her name being added.