Family Income Benefit
Family income benefit is life insurance that pays out differently to traditional life insurance. If you're covered when you pass away, our Family Income Benefit Life Insurance pays out a regular tax-free income to your loved ones until the end of the term. Conventional life insurance pays a single amount of money.
With family income benefit life insurance you're covered for as long as the policy runs. Once the term ends, the cover and any income payments stop.
For example, if you have a 20 year policy and pass away five years into this, then the policy will pay out a regular income for the remaining 15 years. If you die 16 years into the policy, it will pay out for the remaining four years of the term.
So if you die nearer the end of the term of the policy the total payout will be less than if you died earlier in the term.
With family income benefit the total payout decreases over time, so this insurance is cheaper than an equivalent level term life insurance policy for the same term.
Family income benefit is a cheap and easy way to provide your family with an income, rather than a single amount of money if you pass away. If you have a young family, you might want cover until your children grow up. This income could be used to meet everyday expenses or to pay for specific on-going expenses, such as school or university fees.
If it's to provide your family with an everyday income, work out how much money they're likely to need each month and base it on this. If the cover is for the main income earner in your household, their income may need to be replaced. If it's the main carer being covered, estimate how much you might need to pay someone to do everything they do.
Don't forget that prices rise over time so you'll need to factor this in when deciding on the amount of income needed. You may also have other life insurance which will pay out in the event of a death.