Certified Financial Consultant (CFC) Practice Exam 2026 – The All-in-One Guide to Exam Success!

The primary focus of employing a "Needs Approach" in insurance planning is to assess liabilities and future financial needs. This methodology involves a thorough analysis of an individual's or family's financial responsibilities and goals, ensuring that insurance coverage is tailored to meet those specific needs.

In this approach, planners evaluate various factors, including existing debts, ongoing living expenses, future education costs for children, and retirement needs. By identifying these key financial obligations, the "Needs Approach" helps to determine the appropriate amount of insurance necessary to protect loved ones in the event of an untimely death or significant change in financial circumstances.

The emphasis is on understanding personal circumstances and aspirations, rather than just choosing a policy based solely on cost or legal requirements. This ensures that insurance coverage provides effective financial security and supports the overall financial plan tailored to the individual's unique situation.