Certified Financial Planner (CFP) Practice Exam 2025 – All-in-One Study Guide for Exam Success!

Life insurance is particularly beneficial in the case of a family crisis involving loss because it provides financial protection to the surviving family members after the death of the policyholder. This form of insurance can help cover various expenses that may arise during a difficult time, such as funeral costs, mortgage payments, education expenses for children, and any other financial obligations. It serves as a safety net that ensures the family's financial stability, allowing them to maintain their quality of life and manage expenses without the immediate burden of lost income.

In contrast, life insurance might not play as significant a role during the retirement phase since the primary financial needs typically shift towards drawing down retirement savings rather than ensuring income replacement. Additionally, while establishing an investment portfolio or consolidating debt may involve financial planning, these activities focus on different financial goals and do not provide the same immediate protection for surviving family members as life insurance does in a crisis scenario.