Estimate what the tax payment is likely to be, then purchase a policy that will pay at least that amount. Remember to review your policy and increase your coverage, if necessary, as the property increases in value over time. North American interest rates have fallen to levels not seen since the 1950's. With low inflation here in Canada and an election year in the U.S., rates are expected to remain low at least through the end of 1996. Whatever types of fixed-income securities you hold, it is possible to enjoy reasonable earnings even in today's environment of low interest rates.
Balance is the key.
In an interest rate environment where rates are stable, money market funds offer a stable, consistent yield. If rates rise, yield to the investor will also rise. As rates decline, so too will yield. A bond or a mortgage fund is appropriate if you have a longer term focus. Both bond and mortgage funds increase in price as interest rates decline.