Family income benefit insurance is one of the best ways of making sure your family is taken care of after your death; but what is it and how does it work? In this blog, we’ll be taking a look at the family income benefit definition, how this policy works, and who it’s for.
How does family income benefit UK policy work?
When you take out a family income benefit policy, you will be responsible for paying monthly premiums in exchange for an income paid to your surviving family members if you die within the policy term. Family income benefit premiums are either reviewable, which means that they will be evaluated by your insurer at specific intervals, or they are guaranteed, which means that they will remain the same throughout the period of the policy. Reviewable premiums are usually reviewed every 5-10 years and are often increased.
In the event of your death, a family income benefit insurance policy will pay out a tax-free, regular income until a pre-determined date in order to replace any income lost. For example, if you opt for a term policy for 20 years and your family members make a claim within 10 years, your policy will continue to make payments for the next 10 years. If a claim was made after 15 years, there would only be five more years of payouts.
Who is family income benefit insurance for?
Managing finances can be extremely difficult for families that have recently lost a loved one, especially if the passing of a parent has led to additional costs, such as a need for childcare or a loss of regular income. Family income benefit is suited to people who want to make sure that their loved ones can benefit from a regular income after they pass away in order to handle their budgets and pay the household bills.
If you’d like to secure your family’s future with a family income benefit, get in touch with our team at SimsFS today.
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