Ace the Arizona Life & Health Exam 2025 – Your Path to Insurance Excellence!

The needs approach for life insurance planning focuses on assessing an individual or family's financial requirements in the event of premature death. This involves calculating the financial implications of losing a primary income earner and determining sufficient life insurance coverage to meet those needs.

Creating lump sums typically addresses specific financial needs, such as:

- Education expenses for children, which would involve setting aside sufficient funds to cover future tuition and related costs.

- Debt repayment, ensuring that outstanding debts can be settled, relieving family members of financial burdens.

- Replacement of lost income, providing a sum that supports the household during the transition period after a loss.

While employee benefits may contribute to a family's overall financial security, they do not require a lump sum to be created through life insurance. Employee benefits, such as health insurance or retirement plans, often provide ongoing support rather than a one-time financial need. Therefore, in the context of this question, employee benefits stand apart from the other options that typically call for the establishment of a lump sum through life insurance.