Alex and Jamie, both 40, have two young children (2 and 5). Alex earns $120,000 and Jamie earns $60,000 annually. They have a $400,000 mortgage and $100,000 in non-registered investments. They prioritize protecting their family's financial stability in case of an unforeseen event. Which insurance and investment combination is most appropriate?

Question: Alex and Jamie, both 40, have two young children (2 and 5). Alex earns $120,000 and Jamie earns $60,000 annually. They have a $400,000 mortgage and $100,000 in non-registered investments. They prioritize protecting their family's financial stability in case of an unforeseen event. Which insurance and investment combination is most appropriate?

Answer options:

• Life insurance for both, with Alex having a larger policy, and establishing an RESP for the children's education.
• Critical illness insurance for both, and maximizing TFSA contributions before considering RESPs.
• Disability insurance for Alex, group life insurance through his employer, and investing in a diversified portfolio for long-term growth. ✅ Term life insurance for both parents, with levels sufficient to cover the mortgage, income replacement, and future education costs, alongside regular RESP contributions.

Correct answer: Term life insurance for both parents, with levels sufficient to cover the mortgage, income replacement, and future education costs, alongside regular RESP contributions.

Explanation: Term life insurance provides cost-effective coverage for their specific needs during the dependency period (mortgage, income replacement, education). Coupling this with consistent RESP contributions addresses their children's future education, creating a holistic protective and growth strategy for their young family.