What is Family Income Benefit Insurance?

Family Income Benefit Insurance is a type of life insurance that pays out a tax-free regular income for a set amount of time if you were to die or suffer a critical illness.

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Family Income Benefit Insurance
Parents have added financial responsibilities to their families. In the event of death or long term sickness, insurance can help out with the finances

Whilst most people think about covering their mortgage in the event of death or serious illness, have you thought about how you would pay for all of your living expenses if someone was no longer around?

Whilst a lump sum to pay off the mortgage is always a priority. Your loved ones may start to struggle in the event of the loss of the main breadwinner. Therefore Family Income Benefit Insurance can help bridge the gap by paying a set amount of money each month for a set amount of time.

You may want to know that your family have a set amount of income up until your youngest child has been through University. You will then know that your family would be able to have the finances to live in the family home whilst you were gone and continue to live day to day.

This works by typically paying a monthly pay-out after the death of the insured until the end of the cover period.

So, if there was a death in year 2 of a 25-year term then the policy would pay the monthly benefit that was set for the remainder of the 23 years. The key difference to most other protection policies is that they are designed to provide a lump sum. But this plan will provide ongoing support after you are gone. Therefore, the name of Family Income Benefit Insurance is just that. An income provided to your family after you are gone.

This type of cover is particularly crucial for those who have a young family and want to know they will be protected in the upcoming years. The bills and household expenditure will still be there so providing comfort and support to your family when they may need it most.

What does it cost?

Your monthly premiums will depend on:

01.

Your age.

The older you are the more expensive it will be.

02.

The annual income you would like as a payout.

The higher the income you choose, the more you will pay in premiums each month.

03.

Smoker status and health issues.

Anything that affects your health will decrease your life expectancy and increase how much you pay for life insurance.

This type of policy is usually cheaper than Level Term life insurance because the amount an insurer pays out reduces throughout the policy's term.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.