What is Family Income Benefit?
Family Income Benefit is one of the lowest cost ways of providing for your family after your death or if you suffer a critical illness and is designed to pay out a tax free income if you die during the term of your policy.
Why do I need family income benefit cover?
In a time of great emotional stress, a Family Income Benefit policy can provide financial support to maintain your family’s quality of life by:
- Replacing your lost earnings
- Paying for household bills and mortgage repayments
- Paying for your children’s education
- Maintaining your family’s lifestyle after your death
- Replace maintenance payments for your children until they reach adulthood
What does it cover me for?
The most common reasons for buying family income benefit are to provide for your children’s education and upbringing or to make sure your spouse still has your income tax free until retirement age or for parents to insure each other to provide for the children after divorce.
What should I consider when buying a family income benefit policy?
Should it include critical illness benefit and if so, then all the same considerations should be given to the quality of critical illness definitions on offer as you would with lump sum critical illness. Consider whether a combination of a lump sum then followed by an income would be appropriate for your circumstances. This is a low cost way of providing good family protection and can be used as a stepping stone to full lump sum protection in the future.
Lump sum or Income?
Family Income Benefit is the least known of available insurances with most people tending to go for lump sum benefits which they then invest in high interest savings accounts and draw the income from there. However this method is highly susceptible to interest rate changes and inflation and it also means that the income from the lump sum is taxable. By choosing Family Income Benefit, you can opt for an inflation proof, tax free income of whatever amount you choose, guaranteed to be paid out in the event of a claim for as long as you would want to have your beneficiaries receive it.
For a no obligation quote simply give one of our advisers a call on 01933 303020. Or alternatively, please browse our site for more information on the various types of insurance we can provide. If what you want is not listed above, please call our friendly advisers who can guide you through the complicated world of Insurance.