Family Income Benefit

Standard term insurance pays out a lump sum – all very welcome in a time of financial crisis. But it also brings with it decisions about how the money should be managed once immediate debts and other obligations have been settled.

Some families especially might prefer a regular income after the death of the breadwinner, in which case a family income benefit policy could be worth considering.

This sort of policy will provide a monthly tax-free income which will be paid until the end of the agreed policy term.

You can even opt to have the payment increase over the term to mimic would-be pay rises and increases in the cost of living.

The biggest disadvantage of this type of cover is that, once the policy term finishes, the income will stop. For example, if you take out a 25-year policy, but die two years before this policy expires, your dependents will only receive an income for the final two years.