Maria, a 60-year-old business owner, wants to leave a significant legacy to her grandchildren and cover potential estate taxes. She has maximized her RRSP, TFSA, and non-registered investments. She also wants to ensure she doesn't outlive her coverage. Which type of insurance is most appropriate for her needs?

Question: Maria, a 60-year-old business owner, wants to leave a significant legacy to her grandchildren and cover potential estate taxes. She has maximized her RRSP, TFSA, and non-registered investments. She also wants to ensure she doesn't outlive her coverage. Which type of insurance is most appropriate for her needs?

Answer options:

• A. A 10-year term life insurance policy. ✅ B. A universal life insurance policy with a substantial death benefit.
• C. A decreasing term life insurance policy tied to her business loan.
• D. An accidental death and dismemberment policy.

Correct answer: B. A universal life insurance policy with a substantial death benefit.

Explanation: A universal life insurance policy offers a permanent death benefit that can be funded to cover estate tax liabilities and provide a legacy. Its permanent nature ensures coverage won't expire, addressing her concern about outliving the policy, and its tax-advantaged growth component can further build wealth for her heirs. Term insurance is temporary and would expire before her anticipated need.