Family Income Benefit

Family income benefit is a type of life insurance that unlike traditional policies provides beneficiaries with a regular, tax free income as opposed to a prearranged one off lump sum.

This type of policy can be a good option for those that would rather leave their family with an income benefit that would help replace a lost income and assist with budgeting long term.

How does Family Income Benefit work?

Based on the individual circumstances the policy holder decides an annual benefit and the duration of the policy known as the term.

If the policy holder passes away during the term – the chosen income will be paid to the beneficiaries for remaining duration of the policy’s agreed term.

This means that if for example you were to take out a 30 year policy and pass away after 25 years, the insurer would only pay out the agreed income for the remaining 5 years of the term. If you however passed away in the first year of the policy – insurers would pay the agreed annual income for the remaining 30 years.

If the policy holder passes away after the term of the policy has ended, there will be no pay-outs at all.

How much does Family Income Benefit cost?

The monthly premiums for family income benefit will depend on;

Age

The policy holders age – the older the person the more expensive it will be.

Annual income pay-out

The higher the annual income pay-out amount chosen, the higher the monthly premiums will be.

Health issues

Any past or existing health issues that could decrease a policy holder’s life expectancy will likely increase the amount you pay for life insurance.

This type of policy is usually cheaper than level term life insurance because the amount an insurer pays out reduces throughout the policy’s term.

Is a Family Income Benefit suitable for me?

For those seeking cost effective insurance that would help to replace their income in the event they were to pass away – a family income benefit policy could be the right choice.

For some families who have lost a loved one, managing and making financial plans around a large lump sum can be extremely challenging. Trying to cover all costs, mortgage payment, debt, education fees and household bills can be difficult to budget and overwhelming for those already struggling with grief.

This is where a family income benefit can help – with beneficiaries receiving a simple, regular income that makes managing the bills and the future easier to handle.

Find out more about Family Income Benefit

If you are unsure about what life insurance is right for you and would like professional, impartial advice from seasoned financial planning experts then Opul Life can help.

Call – 01245 408 602 today to speak to one of our friendly team who can help guide you through the whole process and give you complete peace of mind that your loved ones are protected.