Why You Need an Income Continuation Plan

Jul 19, 2021 1 min read

What Is an Income Continuation Plan?

An income continuation plan outlines how your family will continue to have the steady income needed to live your current lifestyle should something happen to someone who contributes to the household income. It answers the question; “how would our family survive if my spouse or I become disabled or pass away?”

Why Is Having an Income Continuation Plan Important?

The majority of American families would face financial difficulties if someone who contributes to the household income was no longer able to do so. Consider the many things wages cover — rent/mortgage, food, utility bills, car payments, gas, debt payments, household supplies. The list goes on and on. If one person’s income is no longer in the picture, would your family still be able to cover everything?

You should also consider the long-term savings goals that your family is working toward. Do you have college funds for your children? Would your partner be able to continue to maintain saving for their education without your income? A plan can help ensure that those goals can still be met.

How Life Insurance Can Help While You’re Living

Whole life insurance policies not only provide protection for surviving family members, they also accumulate value so you may be able to access that money while you’re still alive. Living benefit riders ensure that you can access your benefits early should you have a terminal or chronic health issue that impacts your family’s income. While accessing that money prior to death can help your family, it decreases the payout they’d receive later and may include taxes and fees.

How Life Insurance Can Help After a Death

Using life insurance as a way to replace income should someone pass away is a suggested standard practice for individuals with dependents. Using life insurance as income replacement likely necessitates purchasing additional policies above and beyond the coverage your workplace provides at no cost —people often choose to replace 5-10 years of their annual income through a life insurance policy. This also ensures that the policy follows you if you no longer work for that employer.

However, this is typically paid out in one lump sum that may not help with continued family needs — things like car payments, food and saving for college. Some life insurance options, such as Farm Bureau’s Income Guard Term Life, structure that payment differently. Instead of deciding on a lump sum your family would receive, you can look at your household budget to determine how much income your family would need to replace each month. They would then receive a monthly amount — just like a paycheck — to address their needs.


Talk with a Farm Bureau Financial Services agent about what would work best for your family’s income continuation plan. Together you can find the coverage that fits your needs — such as riders to help cover chronic care or a policy that provides monthly payments to your beneficiaries.  


Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.