What is Family Income Benefit?
It is a type of term life insurance, but rather than paying out a lump sum to your loved ones upon death, it would pay a fixed, tax-free, monthly income instead.
The payments would start when you pass away and would continue until the end of the policy. For example, if you had a 30-year policy, and you died after 10 years, your family would receive the monthly income for 20 years. If you died after 5 years, payments would be made for 25 years.
Why choose Family Income Benefit?
As it is a monthly income rather than a large lump sum, it can be a more attractive option for families. It allows you to budget and know exactly what is coming in every month and is perhaps more reliable and easier to manage. A large lump sum payment can be easily frittered away.
If you have a young family, you may want to cover them until your children are all grown up and no longer financially dependent or ensure there is enough coming in to cover a mortgage for example.
It is similar to standard life insurance regarding choosing term and level of cover. Factors that affect the cost are all the same too i.e. health and lifestyle, BMI and smoking status etc.