When using the needs approach for life insurance planning, which of the following is NOT typically a reason for creating lump sums?

The needs approach for life insurance planning emphasizes assessing the financial requirements of dependents after an individual's passing. This approach typically considers various immediate and future financial obligations that need to be addressed through lump sum payments.

Final expenses are often one of the primary considerations, as they cover costs like funeral services, medical bills, and other end-of-life expenses that can arise unexpectedly. Charitable donations are another significant reason for creating lump sums, allowing individuals to leave behind a legacy or support causes they are passionate about after their death.

Education funding is also a critical factor in life insurance planning. Parents often wish to ensure their children have access to higher education, and a lump sum can be earmarked for this purpose, providing financial security for educational needs.

In contrast, employee benefits typically refer to packages provided by employers, such as health insurance and retirement plans, designed to support employees and their dependents during their lifetimes rather than as part of a life insurance planning strategy. Employee benefits are not generally a reason for creating lump sums in life insurance as they do not pertain to the financial needs that arise from the loss of an individual’s income due to death. This differentiates it from the other options that are more directly aligned with financial needs that would be addressed through life