Certified Financial Planner (CFP) Exam 2025 – 400 Free Practice Questions to Pass the Exam

In assessing life insurance needs for a single parent, understanding the future independent income of their children is crucial. This consideration reflects the potential financial impact that the loss of the parent would have on the children's ability to support themselves in the future. Children may need ongoing financial support until they reach a certain level of independence, typically correlated with completing their education or reaching adulthood, at which point they could start earning their own income.

The focus on future independent income ensures that the life insurance policy can provide adequate resources to support the children’s education and living expenses until they can successfully fend for themselves. This approach allows a single parent to secure their children's financial future even in their absence.

While aspects like the parent's investment strategies, cost of living, and current debt obligations all play significant roles in overall financial planning and risk management, they do not directly address the immediate and long-term needs of the children in terms of securing their livelihood after a parent's death. Each of these factors is essential for the parent’s overall financial health but does not specifically inform the life insurance needs as clearly as the potential future earnings of the children do.