Chartered Retirement Planning Counselor (CRPC) Practice Exam 2026 - Free CRPC Practice Questions and Study Guide

Having health insurance is crucial for retirees facing cash flow problems primarily because it prevents out-of-pocket expenses from escalating. As individuals age, their healthcare needs often increase, and medical expenses can become one of the most significant financial burdens they face in retirement. Without health insurance, a retiree might encounter unexpectedly high medical bills, which can severely impact their limited budget.

When retirees have insurance, they typically experience a cap on their out-of-pocket costs, which protects their finances. This is particularly important during times of cash flow difficulties, as unexpected medical expenses could lead to financial distress, forcing them to deplete savings or resort to debt. Thus, health insurance helps manage health-related expenses more predictably, allowing retirees to allocate their limited resources more effectively and ensuring they can maintain their standard of living.

The other choices do not capture the essential protective role that insurance plays in managing healthcare costs during retirement. They may create confusion regarding the financial framework surrounding health expenses in retirement but do not focus on the actual immediate benefit that health insurance provides in the context of cash flow management.