Of all the policies which come under the umbrella term of life insurance, family income benefit is perhaps the least well known. Despite being relatively low cost and providing priceless, life changing cover, family income benefit is too often seen as an added extra for families who already have comprehensive cover. As its name suggests, the policy provides an income to the family. Cover is paid as a tax-free monthly sum following death or diagnosis of a terminal illness.
Family income benefit is designed to protect those who are financially dependent on your income. Because of this, the policy is often most suited for families with children, but it can be suitable in other circumstances too. The policy allows surviving family members to maintain their current standard of living – the standard of living the deceased family member was able to provide through their income. For couples with children, cover is typically taken until the children would no longer be financially dependent on the parents (eg: once they reach 21 years old). The level of monthly cover can be adjusted to ensure it is sufficient to allow the family to continue their standard of living while no longer receiving the income the deceased family member was able to provide.
A fully comprehensive life insurance portfolio would include each of the following policies:
- Life Insurance that would clear the mortgage
- Critical Illness cover that would clear the mortgage and/or pay for necessary treatment and lifestyle alterations
- Income Protection that would replace lost income if no longer able to work
- Family Income Benefit that would replace lost household income for the family
Depending on your unique circumstances, your preference of cover and your current financial position, a specific selection of the above covers may be appropriate.
Life insurance policies provide peace of mind that should the worst happen, be it illness, disablement or death, your family is financially protected. No type of life insurance policy is compulsory but each policy serves a valuable purpose. For more information on this policy, any other life insurance products or a review of your current life insurance portfolio, we’re here to help with free, professional advice.