Certified Financial Consultant (CFC) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Certified Financial Consultant Exam. Enhance your understanding with detailed questions, hints, and explanations. Boost your confidence for the CFC test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the primary focus of needing a "Needs Approach" in insurance planning?

To estimate market value of assets
To assess liabilities and future financial needs
To choose the lowest cost insurance policy
To comply with legal insurance requirements

The correct answer is: To assess liabilities and future financial needs

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.