Michael, age 45, owns a small but growing tech company in Ontario. He wants life insurance to secure a bank loan for business expansion, initially for a 10-year term. He anticipates that within 10 years, the business will be stable enough to self-fund. He also intends to use the policy to fund a buy-sell agreement with his business partner. Which of the following would be the most suitable recommendation for Michael?

Question: Michael, age 45, owns a small but growing tech company in Ontario. He wants life insurance to secure a bank loan for business expansion, initially for a 10-year term. He anticipates that within 10 years, the business will be stable enough to self-fund. He also intends to use the policy to fund a buy-sell agreement with his business partner. Which of the following would be the most suitable recommendation for Michael?

Answer options: ✅ A 10-year Term policy with a convertible rider

• A Term-To-100 (T100) policy
• A Whole Life policy with cash surrender values
• A Universal Life policy with an increasing death benefit

Correct answer: A 10-year Term policy with a convertible rider

Explanation: A 10-year Term policy with convertibility provides the initial low-cost coverage for the loan. The convertibility option allows him to secure a buy-sell agreement later without new medicals, crucial for business planning, as a convertible term allows conversion to permanent insurance at a future date without evidence of insurability.