How will you replace your income when it's gone?

How will you replace your income when it’s gone?

Because one day, it will be gone for all of us. I’m not talking about some doomsday scenario. I’m talking about events in your life that can and often will happen, reducing your income to zero.

Do you have a plan to see you and your family through? How much of your current monthly income would you need to replace if this happened? In other words, do you have an income replacement plan?

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By studying the past, we can plan for the common emergencies which will likely come up in the future.

Among the many financial emergencies in life, the 4 most common events when people will need a plan to replace the monthly income they have become used to are:

Unemployment: If you’ve ever had a job, you understand that employment is not guaranteed. By choice or not, you will find yourself unemployed at some point in your earning years.

Did you know you have insurance if this happens? You do.

It’s called unemployment insurance and it’s paid by your employer.

Depending on the circumstances of your unemployment, you may be able to collect unemployment benefits for a period of time. This coverage is temporary and is only a small percentage of what your actual income was.

According to the Bureau of Labor Statistics, the person who loses their job will be unemployed for about 3 months, on average.  If you have no emergency savings to replace your income for a period of 1 to 3 months, this may be your only safety net.

Disability: You’re probably picturing an accident causing you to become disabled, right? That’s a misconception.

According to, 90% of disabilities are caused by illnesses, not accidents. Heart attack, stroke, diabetes, and cancer can be fatal, of course. But, thanks to modern medicine, more people are able to survive these issues. They commonly result in the disability to work.

Did you know you have insurance if this happens? You do.

It’s called Social Security. The coverage will pay only a small percentage of what your actual income was. If you have no other savings or personal disability insurance plan to replace your income, this may be your only financial safety net.

Retirement: Unlike disability and unemployment, retirement is voluntary. It’s something we all are working toward. Your working income will stop when you retire. More people are delaying full-time retirement because they either want to keep working or they can’t afford to stop!

Did you know you have insurance when you retire? If you’re old enough, you do.

It’s called Social Security. Depending on your age, you can begin receiving Social Security benefits when you retire. The amount of money you will receive is based on a percentage of what your income was when you were working.

Most people know they should be saving for retirement and many people do. The Employee Benefit Research Institute’s confidence survey shows less than half of workers have tried to calculate how much money they will need for retirement.

Although there is no specific rule to determine how much income you will need in retirement, according to, the general rule is you should aim to replace 80% of your pre-retirement income.

Social Security benefits will replace only about 40% of your pre-retirement income and the percentage is lower if you are in a higher income bracket. If you have no other plan to replace your income, this will be your only safety net.

Death: Ugh! The previous things MIGHT happen. This WILL happen.

I put this last on the list because the hope we all have is to live to old age, maintaining our good health along with a good income throughout our retirement years. Death is unavoidable and unpredictable.

But no matter when death comes, your income will stop. Whether that is your paycheck from work, unemployment income, disability income, or Social Security income, the checks stop coming.

What compounds the emotional pain of your death is the economic pain that the loss of your income will bring to those you care about and who count on your income.

Whether you are 25, 50, or 75 years old, someone is counting on your income. That may only be you, but likely there is or will be someone else.

There is no ONE solution for all of these risks. My goal is to help you see that your “income” needs insurance. After all, what is insurance? It’s a plan that will help you recover financially from a loss.

  • Because employment and your health are uncertain, having a short-term Emergency fund and disability insurance is also important.
  • Being able to maintain your standard of living throughout retirement is something we all hope for. But it will require a disciplined investment plan.
  • Because your death is certain, Life insurance is critically important.

Hesitation and procrastination are the stumbling blocks to addressing anything that you know you need but perceive to be difficult.

Call us to discuss your income protection concerns. We are not going to put pressure on you to buy something.

We will help you discover what your real needs are and develop a plan to protect your income through every stage of your life.

Remember, “we don’t just sell insurance, we educate.”

We would welcome the opportunity to help you build the most efficient plan to protect your family. Call our office at 405-340-0606.

Or, complete this short form and we’ll reach out to you and start the conversation.

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Are you ready to save time, aggravation, and money? The team at Allen Drew Insurance Agency is here and ready to make the process as painless as possible. We look forward to meeting you!

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