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Family Income Benefit

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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:

30 years old

40 years old

50 years old

1 in 18

1 in 8

1 in 5

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.

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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.

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Common Family Income Benefit Questions

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    Family Income Benefit Quote Comparison

    aegon

    Aegon

    Aegon Family Income Benefit plans allows you to add waiver of premium cover for an additional sum.

    • Maximum benefit: Unlimited
    • Maximum age: Policy must end before 85th birthday
    • Minimum policy term: 5 years
    • Maximum policy term: 50 years
    aig

    AIG

    The AIG YourLife Family Income Benefit Plan allows an individual to insure a maximum total benefit (i.e. the sum of all the monthly benefits over the policy term) of £500,000 without having to ask any financial questions.

    • Maximum benefit: Unlimited
    • Maximum age: Policy must end before 90th birthday
    • Minimum policy term: 3 years
    • Maximum policy term: 70 years
    legal & general

    Legal & General

    Legal & General’s Family Income Benefit includes Accidental Death Cover as standard, which will pay out the lower of £300,000 or the sum applied for if you die during the underwriting process. This lasts for 90 days.

    • Maximum benefit: £10,000 per month
    • Maximum age: Policy must end before 70th birthday
    • Minimum policy term: 5 years
    • Maximum policy term: 40 years
    liverpool victoria

    Liverpool Victoria

    Liverpool Victoria’s Family Income Assurance plan comes with guaranteed premiums as default and the option to add waiver of premium to the policy.

    • Maximum benefit: Unlimited
    • Maximum age: Policy must end before 90th birthday
    • Minimum policy term: 4 years
    • Maximum policy term: 45 years
    royal london

    Royal London

    Royal London’s Family Income Benefit includes Terminal Illness Cover as standard.

    • Maximum benefit: £2,500 per month
    • Maximum age: Cover must end before 80th birthday
    • Minimum policy term: 5 years
    • Maximum policy term: 50 years
    vitality

    Vitality

    Vitality Family Income Cover will also pay out a lump sum towards funeral costs upon a claim as well as paying the benefit.

    • Maximum benefit: Total cover (i.e. sum of all monthly benefits expected over the full term of the policy) must not exceed £20 million
    • Maximum age: Cover must end before 80th birthday
    • Minimum policy term: 5 years
    • Maximum policy term: 50 years for guaranteed premiums; 60 years for reviewable premiums

    Need Family Income Benefit 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 2198 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.

    Great service. Cannot recommend highly enough.

    Kirsty Bain
    17/04/2019
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