Family Income Benefit

Parkview Mortgages are highly experienced professional advisers for mortgages, family protection, and home and contents insurance.

What is Family Income Benefit?

Family income benefit insurance is a type of term life insurance that will give regular financial support to the family of a policyholder if they die or are diagnosed with a terminal illness.

Where it’s different from standard life insurance is that it pays out a regular monthly income, rather than a lump sum.

How does family income Benefit Work?

A family income benefit policy only pays out if you die during the length of the policy, known as the ‘term’.

If you take out a 20-year term policy and a claim is made 10 years into it, it’ll continue to pay out for another 10 years. If the claim was made 15 years in, payouts would only continue for five years.

This is different to a traditional life insurance policy, which pays out an agreed lump sum when the policyholder dies.

Who is family income Benefit For?

Family income benefit may appeal to families with young children – particularly where one parent is the primary earner – as it provides a regular income, often with cheaper premiums than other life insurance policies.

While most of us think of life insurance to keep a roof over their heads, family income benefit will pay your dependents a tax-free monthly income. This could be for outgoings such as mortgage payments, bills and childcare costs – in other words, it’ll help keep food on the table too.

Most importantly, in the event of both parents having an untimely death, family income benefit would allow your nominated guardians to raise your children in the lifestyle you would like them to enjoy.

Day-to-day bills

Bills like childcare or utilities will still need to be paid if the main earner or homemaker dies. Younger families are particularly vulnerable. Family Income Benefit can ease the financial burden.

Future children

If the worst happens in a single parent family, the future prospects for children can be greatly improved with a monthly income payment. It’s payable to the guardian who supports the child as they grow.

For renters

1 in 5 people rent the property they live in, and for many this is a longer-term option. Renters still need the right cover in place should their partner or spouse dies. If this happens, Family Income Benefit can help pay rent and bills.

Education fees

Parents always want the best for their children, and the monthly income payment could make all the difference in maintaining a child’s education on the death of your client.

Divorce payments

If one of the divorce partners dies, maintenance payments could be at risk. A Family Income Benefit monthly income payment ensures children are brought up securely, without any financial worries.

The cost of care

If your client is a full-time carer for their loved one, and they’re suddenly no longer around, the monthly income can continue to fund home care or other care costs.

Family Income Benefit cover options

Level cover

Your annual amount of cover, and the premium you pay is fixed when the plan starts and won’t change. Cover won’t keep up with inflation and will buy less in the future.

Inflation-linked cover

The amount of cover will go up in line with inflation (RPI), and the premium will go up by RPI.

Guaranteed premiums

This means your premiums are fixed and won’t change unless it’s inflation-linked cover. With inflation-linked cover both the premium and annual amount of cover will only increase by the rate of inflation each year.

A family income benefit policy is not investment based. If no claim is made during the term or you stop paying your premiums / cancel the policy there will be no premium refunds. It only pays out if you die during the length of the term.

Its important to make sure you have a Family Income Benefit Insurance policy which fits your individual needs. We work with insurers from across the market to find the most suitable insurance policies to match your insurance needs.

Contact Parkview Mortgages today for a fee free no obligation insurance review.