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:
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.
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.
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
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.
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.
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:
Other personal factors that you have less control over which will still impact on the cost of your policy include:
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.
Aegon Family Income Benefit plans allows you to add waiver of premium cover for an additional sum.
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.
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.
Liverpool Victoria’s Family Income Assurance plan comes with guaranteed premiums as default and the option to add waiver of premium to the policy.
Royal London’s Family Income Benefit includes Terminal Illness Cover as standard.
Vitality Family Income Cover will also pay out a lump sum towards funeral costs upon a claim as well as paying the benefit.
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.
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