Family Income benefit is a type of life assurance. Policies run for a set period known as the term. If the policy holder dies within this term the policy pays out a regular tax-free income until the end of the term.
Cover is only for as long as the policy runs, once the term comes to an end the cover and income payments no longer exist.
The total amount paid out by the policy depends on when the policy holder dies. If they die in the early years of the policy, the total pays out would be more then if they died nearer the end of the term of the policy.
Family Income Benefit is a cheap and easy way to provide family with an income rather than a lump sum when the policy holder dies. The income could be used to cover everyday expenses or to pay for a specific ongoing expense such as schools or university fees.
Premiums are based on the amount of cover needed, how long it’s for, their health, their lifestyle and age. Individuals can opt for a level income or pay more for an income that rises by a set amount each year. Waiver of premium cover is also usually available. This ensures premiums are met if individuals are unable to pay them because they fall ill or are unable to work.