Family Income Benefit

Securing your family's financial future.

An often-overlooked type of cover, Family Income Benefit protects a level of income for a fixed term. In the event of death. the amount of income chosen at the outset will be paid for the remainder of the term of the plan. Often the term is set to protect you until your youngest child is 18 or 21. This protection is not as expensive as you may think.

Depending on your circumstances, indexation might be an option for this type of plan to protect the purchasing power, although the benefit can be level. If indexation is elected at the outset, the premiums and benefits would rise annually, normally following the Retail Price Index.

Family Income Benefit is one of the least expensive forms of life insurance. It differs from most other types in that it is designed to pay the benefit, in the event of death, as an income rather than a lump sum, although there may be the option of taking a lump sum depending on the policy.

Regular Tax-Free Income Payments

In the event of a claim, income can be paid monthly, quarterly or annually, and under current rules, the income is tax-free. This makes it ideal for Family Protection where a family is looking to insure the main breadwinner over a specific term, for example, up to their retirement age.

Extra Cover Options

Family Income Benefit can also include Critical Illness Insurance, which is designed to pay the selected income if the policyholder is diagnosed with a critical illness within the chosen term. Critical illness conditions vary from insurer to insurer, but in general include conditions such as some forms of cancer, heart attack and stroke. In addition to these "core conditions" applicants can also select comprehensive cover, which usually includes a further 25 to 30 conditions.

Family Income Benefit therefore should be considered when looking to buy insurance for Family Protection. Family Income Benefit is a low-cost, tax-efficient solution for Family Protection.

Please be aware that in some cases this type of assurance is based on an assessment of the health of the applicant.

THE PLAN WILL HAVE NO CASH-IN VALUE AT ANY TIME AND WILL CEASE AT THE END OF THE TERM. IF PREMIUMS ARE NOT MAINTAINED, THEN COVER WILL LAPSE.

CRITICAL ILLNESS PLANS MAY NOT COVER ALL THE DEFINITIONS OF A CRITICAL ILLNESS. THE DEFINITIONS VARY BETWEEN PRODUCT PROVIDERS AND WILL BE DESCRIBED IN THE KEY FEATURES AND POLICY DOCUMENT IF YOU GO AHEAD WITH A PLAN.

Tax treatment varies according to individual circumstances and is subject to change.