Family Income Benefit

Article published on 9th October 2015

Family income benefit provides cover for your household and those dependent on you after your death, so that they may be able to continue paying for their monthly outgoings such as school fees, food and other utilities, allowing them to continue with a similar standard of living.

Family Income benefit

It is important to plan for the financial security of your family in the sad case of your death and instead of a lump sum amount of money, like with regular Life Insurance, your family are given a monthly payment.

But family income benefit plans don't just have to protect your family if you die, the policies may also include critical illness insurance in which case a monthly income is given to your family in the event that you suffer from a specified critical illness such as a serious cancer, stroke or heart attack.

Nobody is certain when or how they are going to die although the probabilities are calculated as 1 death out of 1215 people between the ages of 25 and 34, rising to 1 death in every 112 people by the ages of 55 - 64.*

Every year in the UK, 146,000 people suffer from heart attacks of which 52,000 survive** but even after suffering from the illness, things can be made worse because of been unable to return to work immediately and therefore having to worry about money as well.

To meet the ongoing needs of those you leave behind, you must choose your level of cover accordingly so that the monthly income is sufficient and the length of cover is enough to ensure your children are self sufficient by the time the cover ends.

The cost structure is dependent on your age, your health, lifestyle status and the length of your cover.

The level of cover you are choosing for your family will also affect the premium that you pay.

If you are young and healthy and even if you opt for a long term cover the costs will not be that high but the longer you leave it before organising your cover, the higher the costs you are likely to face.

If your family's finances are mutually dependent on both yourself and your partner, then you can opt for a joint life cover plan, however it is generally wiser to choose two individual single plans for both spouses if the main objective is to protect the future of your children and provide for monthly expenses.

Benefits would be automatically paid to your spouse if you die during the term of your policy. After your death your spouse will make a claim, submit a death certificate and be given monthly benefits according to the cover and duration you set in your insurance policy.

Life insurance experts can talk you through different types of covers and find one that is suitable for you in the long run, taking into account your affordability, objectives and lifestyle. As such it is always advisable to seek advice to ensure you have the best possible policy for your needs.

* Oxford University Bandolier -
** Facts and Figures: Heart Disease in the UK, October 2014. -

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