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Family Income Benefit is an innovative type of life insurance product, which is useful and extremely good value when compared to some other types of life or health insurance.
Family Income Benefit is a life insurance policy that pays an income to dependants on the death of the insured. The income is payable for the remainder of the policy term.
These policies are suitable for people with young families who wish to protect against the loss of income provided by either or both parents.
Family Income Benefit Insurance pays a monthly income or annual lump sum if the policyholder dies whilst the policy is in force. The monthly income will continue at the level specified in the policy, until the policy's termination date. These payments can either be index linked or payable at a flat rate.
- Family income benefit insurance is primarily used to ensure that a family's income is maintained at an acceptable level if the main income provider or providers were to die.
- Family income benefit insurance can also be combined with life insurance, mortgage life insurance and critical illness insurance as part of a package of insurances to provide financial protection for the family.
Family Income benefit plans can be used for various reasons, for example they can form part of divorce settlements. Whilst divorcing couples can often agree on monthly maintenance payments, the consequences of death of either parent whilst their children are still dependant is often overlooked.
Taking out a family income benefit policy the recipient of the maintenance payments is protected should the insured die before the children become financially independent.