Family Income Benefit pays out a regular tax-free income on death for a set period of time.
Many individuals consider Family Income Benefit to ensure that if the worst were to happen their partner and children’s standard of living can be maintained until they are of an age where they become self sufficient.
It’s designed to cover all day-to-day living expenses, including:
- Food
- Rent / mortgage repayments
- Utilities
- Property taxes and related bills
- Car running costs
- School fees etc.
It provides a more manageable legacy for your loved ones, offering regular income support rather than one large lump sum.
It is often set-up alongside mortgage life insurance. The mortgage life insurance pays out a lump to clear the outstanding mortgage balance while the family income benefit covers the regular monthly expenditure your loved ones will still need to meet.
Do I Need Family Income Benefit?
Family Income Benefit, just like any Life Insurance, is designed to benefit your loved ones should you pass away.
Many people turn to Life Insurance because they have a liability, such as a mortgage, that they’re keen to protect. Others want to leave money for their family.
Whatever the reason – or combination of reasons – you’re looking for Life Insurance, it’s important to understand the risk we all face.
What’s the Risk of Passing Away?
Based on ONS life expectancy data, a man with a 25 year mortgage term would have the following chances of passing away before the loan is repaid:
Could Your Family Meet Their Financial Obligations Without You?
If you’re unsure about how essential outgoings would be met or believe your family would face significant hardship after you pass away, it’s sensible to look at ways you can protect their standard of living.
Family Income Benefit may be of particular use to those with children but no partner, as rather than leaving a large lump sum to children who may spend it unwisely it provides a steady income.
This income can see them through until they are of an age where they are out of full-time education and able to stand on their own two feet.
Protecting a House Person
Even where one partner doesn’t work and takes care of the children and home, you may still want to consider insuring them. That’s because the work they do in the home would likely have to be replaced with paid employees if the surviving individual needs to continue working and earning.
How Much Does Family Income Benefit Cost?
There are a number of factors that will determine the cost of Family Income Benefit, some of which are key policy factors you can control, such as:
- Level of cover
The more cover you require the higher the premium for the policy.
- Length of cover
The longer the policy term the higher the risk of needing to claim and this is reflected in higher premiums.
- Including critical illness cover
As the risk of suffering a serious illness such as heart attack, cancer or stroke is far higher than dying you can expect significantly higher premiums.
Other personal factors that you have less control over which will still impact on the cost of your policy include:
- Your age
The older we are, the greater the risk of passing away during the term of the policy
- Your current state of health
Those with severe health conditions, especially those which might limit life expectancy, will typically pay more for Life Insurance to reflect the greater risk the insurer is taking on
- Your smoker status
If you smoke, you’re at greater risk of developing a serious, fatal health condition and so insurers will charge more
- Lifestyle and hazardous activities
Lifestyle habits, such as regularly drinking more alcohol than is recommended, or participating in hazardous activities, could result in an insurer increasing the cost of your cover
- Family history
Has any of your immediate family ever suffered a serious and/or hereditary illness that may impact you? If so, you may pay more for life cover.
You can use our Family Income Benefit Calculator tool to get instant online quotes from the UK’s leading insurers including Aegon, Legal & General and Royal London.
Get Family Income Benefit Quotes & Expert Advice
We are here to ensure you and your family don’t miss out on financial security because appropriate insurances were not put in place. Our experts aim to help provide you with the necessary information to make an informed decision.
If you are still researching then you can use our calculator to compare family income benefit quotes or have a look at the related guides below.
Why Speak to Us…
We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.
- There is no fee for our service
- We are independent and impartial
Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
- We’ve got bargaining power on our side
This allows us to negotiate better premiums for you than you going direct yourself.
- You’ll speak to a dedicated expert from start to finish
You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
- Benefit from our 5-star service
We pride ourselves on providing a 5-star service, as can be seen from our 3768 and growing independent client reviews rating us at 4.92 / 5.
- Gain the protection of regulated advice
You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
- Claims support when you need it the most
You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.