What is Family Income Benefit and how does it work?

I was planning on taking out life insurance for my kids and came across Family Income Benefit, I wanted to know whether this was a better option than normal life insurance?

Question asked by James Laverty
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Answered by Andrew Jenkinson

Family Income Benefit vs. Life Insurance

Family Income Benefit is unfortunately relatively unheard of as an insurance product although it is fantastic for families with young children who want to protect their standard of living until they reach adulthood.

It is effectively a life insurance policy which pays out an annual income rather than a lump sum, the policy term tends to align with when you believe your children will be self-sufficient. Should the worst happen to you an annual payment would then be made to your dependents to ensure they can maintain their standard of living.

More cost effective than term insurance

Family Income Benefit tends to be more cost effective than your typical term life insurance policy as the insurer is paying an annual income upon a claim rather than one big lump sum. The annual income makes the ongoing payments manageable and ensures you do not have to worry about investing a lump sum or overspending and not budgeting correctly for your expenditure in the future.

Drewberry can help

If you would like to discuss this further or have any other questions don’t hesitate to contact us on 01273 646 484 or pop us an email help@drewberry.co.uk. Not only are we completely independent and have access to the whole of market but our service is fee free.

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This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
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