Risk Management – Income Replacement

Jon Glougie

June 7, 2019

When most people think about income replacement, they typically think of Disability insurance. And
while Disability insurance is the best way to protect your ability to earn an income while you are
working, have you ever thought about who else might need your income if you passed away?

In many cases, those people that are building a financial plan together with a partner/spouse typically
build their financial plan with the assumption that they will have two incomes to build this plan with.
Disability insurance is still the best option to replace income in case you are hurt and unable to work,
but if the unthinkable happens, Disability insurance will not help your grieving family if you pass away
while you are young and still building towards your retirement. Whether your spouse/partner/family
need your income to pay off debt (such as a mortgage), or whether they were relying on your income to
help save for retirement, when you are planning for the possible risks to your financial plan you should
consider who might need your income and for how long.

Adding a simple Term Life Insurance policy to your financial plan can help protect you and your
spouse/partner/family in a case of your demise. Although nobody plans on using this insurance, nor
should you plan on dying prematurely, planning for the unforeseen risks will allow you to make your
financial plan complete and protected from all of life’s uncertainties.