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Family Income Benefit
What is Family Income Benefit?
Family Income Benefit is a type of Life Cover that will pay a regular income to your loved ones in the event of the policy holder’s death, whereas standard Life Cover pays a lump sum on death.
If you passed away during the term of your policy and your income was no longer there for your family, how would they pay the bills? If you have two incomes and suddenly your family had to rely on just the one income, how would they cope? Would there be additional child care costs to consider?
These scenarios are not nice to have to think about, however the consequences of lost income for your loved ones could have a major impact on their futures.
How does the policy pay out?
The policy pays out from when the policy holder dies until the end of the policies term. For example, if you started a 30 year term Family Income Benefit policy and you died 7 years later, your family would receive a monthly income every month for the next 23 years. The length of the policy can be chosen by you at the outset, this will depend on what you want from the policy.
What could these monthly payments be used for?
When a person dies, the family bills are still there to be paid. There are the normal household bills, outstanding debts. Family Income Benefit will provide the financial support that you would want your family to have if you were no longer there to provide for them, however there are no rules regarding how the money is spent.
How much cover do you need and how much will it cost?
This will depend on your individual circumstances, you may want a policy that pays out until your young family have grown up, you may have no children but want to provide for your partner, there are many differing profiles that can be considered. The cost of the monthly premiums is dependent on the amount of income that you choose to be paid monthly and how long you want it to pay out for. You age, health and lifestyle are also a factor in the monthly cost.
The policy does not have a cash value when the policy ends.
Please note: You must keep up your premium payments on a policy to avoid the policy being cancelled.