Using Life Insurance for Income Replacement

Income replacement is a very valuable component of financial planning and is especially helpful in life insurance planning. The income replacement approach is a method of estimating the total amount of money you would need today to replace your income in the event of death. This approach takes into account factors such as salary and any additional sources of income, time horizon, and what rate of return you believe you can receive on invested money.

How Income Replacement Works

If your family or partner has your income continuing, they should be able to afford their current lifestyle for the number of years you select. The calculation considers:

• Current annual income — salary, bonus, self-employment income
• Time horizon — how many years you want to replace income
• Investment earnings — the death benefit will be invested, and earnings reduce how much you need to start with
• Existing assets — savings, investments, and other liquid assets that can offset the need

Simple Estimate: Income × 10

A quick starting point: multiply your annual income by 10. So $60,000/year = $600,000 of coverage. But the DIME method gives you a more precise picture that accounts for all your financial obligations.

Our Income Replacement Solution

We have created an easy solution for you to determine how much life insurance you will need to replace your income — then you can customize and apply for coverage, all in less than 10 minutes. Our process handles all the math for you and provides you with a nice, easy-to-understand report so you don't forget the WHY behind your plan. You can get your report and apply for coverage in 10 minutes or less. Start your income replacement plan today!

Done For You

Our income replacement solution takes the guesswork out of the calculation. You provide your income and time horizon — we do the math and walk you through a complete, easy-to-understand plan.