What is Family Income Benefit?
Family Income Benefit insurance is a type of insurance which pays out a monthly, regular tax-free income to the beneficiaries should you die during the term of the policy. It is different from term insurance or whole-of-life insurance in the sense that there is no lump sum payout.
Decide key parameters
The first step in getting a family income benefit policy is to decide how much income will be enough for your family to sustain. Calculate the bills and other living expenses that the policy will need to cover, should you die leaving them without your income. You will also need to decide on the term for which the income will be needed, it could be till the time your children become financially independent, for instance.
Like term life insurance, family income benefit will pay out only if you die within the term of the policy. If you outlive the policy term, there will be no payout. Also, suppose you decide to take a 30-year policy. And decide to opt for £2,500 monthly payout, which is perhaps your monthly income. If you die in the first year of the policy, then family income benefit policy will pay out £2,500 every month for the remaining 29 years of the policy. However, if you pass away in the 25th year of the policy for instance, then the monthly payout will be for the remaining five years of the policy.
Another advantage of family income benefit is that it works out as a budget-friendly option. It is the cheapest form of life insurance available. The reason for this is that the life insurance company is less likely to have to pay a large sum, and even if it has to, it will not be in a lump sum manner. However, like all insurance products the premiums to be paid for the policy will depend on your health, age, lifestyle and the size of income you want the policy to payout.
We would recommend you to talk to one of our advisers for life insurance quotes.
Any quote that your adviser provides you with will take into account your circumstances, your medical history, as well as your budget!
Call 011-3733-4610 – Monday to Thursday from 11.00 to 19.00 and on Friday between 11.00 and 16.00