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How Family Income Benefit Works?

Family Income Benefit is designed to protect your family financially if you die.

It pays out regular fixed payments to your family, beginning when you die and continuing until your policy ends. The payments help to support your family, replacing some of your income and covering costs like bills. Family Income Benefit pays out for the length of time left on the policy when you die. For example, if you pass away ten years after taking out a 20-year policy, your loved ones will receive payments for the remaining ten years of the policy. The total payout from the policy depends on when you die, being larger if you die earlier in the term.

Family Income Benefit is designed to help your family to be financially secure and stable if you pass away. It can assist with lessening the impact of the loss of your income by providing monthly payments instead of a single sum of money. For just a small payment each month, you can give your loved ones up to £2,500 each month if you pass away and your policy includes cover for terminal illness too. This type of insurance is a smart idea for many people, especially those with growing families.

Who Can Family Income Benefit Help?

Family Income Benefit is particularly useful for young families. It can help to provide reassurance that your family will be cared for and financially stable if you pass away. Family Income Benefit pays a regular income over the time left on the policy, instead of a lump sum. This is often more manageable for families, making it easier for them to organise their income and keep their finances secure. It helps to prevent the risk that comes with a lump payment of spending all of the money at once.

Families with young children can benefit from having a policy that will cover the family until the children have grown and left home. It helps with everyday expenses, from bills to school costs. However, your children don’t have to be young, and your family doesn’t have to be still growing to benefit from Family Income Benefit. If you have older children or you even want to ensure other loved ones will have extra financial security when you die, Family Income Benefit can help you.

Why Get Family Income Benefit Insurance?

There are some excellent reasons to choose a Family Income Benefit policy if you want to make sure your family is protected and financially secure if you pass away. If you’re considering the benefits compared to some other options for life insurance, here are some of the top reasons to get a Family Income Benefit policy.

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Family Income Benefit FAQ

Key Person FAQ

Family Income Benefit is a type of life insurance that is designed to provide your loved ones with long-term income. Our Family Income Benefit insurance pays out a regular income to your loved ones. If you're covered by a Family Income Benefit policy when you die, you receive tax-free payments for the remainder of the term. The payments stay the same each month until the policy ends. This is in contrast with level or decreasing life insurance policies, which pay out a lump sum of money.

When a claim is made, the first payment will come along as quickly as possible. It's an important and sensitive time, so your claim will be dealt with swiftly. You can feel reassured that your loved ones will receive the first payment within ten days of making a claim. Keep your policy documents organised with the contact information for making a claim so that they can get in touch as soon as possible.

Most people can benefit from Family Income Benefit, and it is available to a wide range of people. Family Income Benefit is available for anyone who is between age 18 and 70. You also need to be resident in the UK. Armed Forces members and reservists are not eligible for Family Income Benefit.

When you take out a Family Income Benefit policy, the policy pays out up to £2,500 each month when your family makes a claim. The total payout limit is £500,000 across all of your life insurance policies. You can choose how much you pay each month and how much cover you have so that you can contribute however much you can afford.

Some information is required when you apply for a Family Income Benefit policy. However, only basic information about your health is required, and you don't need to provide any proof from a doctor. Simply answer the questions that we ask you and try to be as accurate as possible. Providing accurate information helps to prevent problems in the unfortunate event that your family needs to make a claim. It will reduce the likelihood of a claim being rejected by ensuring all information matches up.

You can choose how long your policy lasts when you apply. The term of your policy can be as short as five years or as long as 50 years, but you can only be covered until you're 80. Many people take out a policy that covers their family while their children are still at home or until they have started their adult life, including graduating from university and other milestones. You should keep in mind that the policy will pay out for the remainder of the term when you pass away, so if you die 15 years after taking out a 20-year policy, it will give your family payments five years,

When you take out a Family Income Benefit policy, you will be covered as soon as your application is approved and you start making payments. There is no minimum number of payments that you need to make before your cover begins. However, it is important to keep up the payments if you want to ensure your cover continues.

Family Income Benefit does cover you if you receive a diagnosis of an illness that cannot be cured or doesn't have a cure. The illness should be expected to be terminal within the next 12 months, and we require confirmation of the diagnosis. There is no extra charge for terminal illness cover.

You will be covered by your policy as soon as you start, but you are required to make monthly payments to maintain cover. Your family doesn't need to continue to make payments if you die, and you can also stop making payments if you receive a terminal illness diagnosis that is within our definition, and it has been confirmed. You can choose to stop making payments whenever you want, but this will end your cover, and you won't receive any payouts or your money back. If you want your cover to continue across the whole term of the policy while you're still alive, you need to continue making payments every month. However, missing one payment won't automatically cancel your policy, as long as you pay it within 60 days.

Can Payments Increase?

Your payments won't increase during the term of your Family Income Benefit policy. You will pay the same each month for the amount of cover that you choose to have. If you want additional cover, you can take out another policy that will provide extra coverage for you.

Can Payments Be Reduced?

If you want to reduce your monthly payments, you can do so. However, you should keep in mind that the amount you are covered for will also decrease if you decide to lower your payments. Being able to decrease your payments provides flexibility and can help you to maintain your cover even if you feel the need to tighten up your spending. Before doing so, think carefully about whether it's a good idea to reduce the cover that you have.

What Happens If You Miss a Payment?

If you miss a payment, it won't mean that your policy ends straight away. If you pay the missed payment within 60 days of the payment date, your cover will continue. However, if you don't pay in time, your policy will be cancelled. You won't be able to start the policy again, and you will no longer be covered, nor will you receive a refund. The best way to pay a regular payment is to set up a direct debit so that the money leaves your bank account automatically every month. It's smart to pay attention to make sure you don't miss any payments, and to take care of a missed payment straight away.

What Happens If You Stop Paying?

If you stop making monthly payments, you will no longer have the cover from your Family Income Benefit policy. When your payments stop, you don't get any money back, so you need to keep paying if you want your family to benefit from the policy. You can miss one payment, as long as you pay it within 60 days of the original payment date. If you want to ensure your cover keeps going, remember to make your payments on time.

What If You Change Your Mind?

You can cancel your policy within 30 days and get the payments you have made refunded. If you choose to cancel your policy later, you won't get any money back. Remember that Family Income Benefit isn't a savings plan, so you only get the benefit from it in the event that your family needs to make a claim.

Is It Possible to Take Out Additional Cover?

If you want to increase your cover, you can't do it with an existing Family Income Benefit policy. However, you can apply for a new policy to add to the existing cover that you have. This will require going through the application process again, and the policy will still be subject to the terms and conditions that are set out. Another thing to keep in mind is that your partner could also take out a policy if they are eligible too. This will be beneficial to your family because you will have the cover you need if your family is without either of your incomes. If your partner passes away, you will be able to make a claim through their policy to claim the payments

Who Receives the Payout?

The payout from your Family Income Benefit policy will be made out to your estate. You can use your will to set out your wishes for who receives the money or a personal representative for your estate can manage it and decide where your assets go. You can use the government's Money Advice Service for advice on how to write your will and what happens if you don't have a will. Make sure to let your family know that you have taken out a Family Income Benefit policy.

How Does Family Make a Claim?

When your family needs to make a claim, they should call the insurance company, who will deal with the claim. Sensitive and sympathetic staff members will deal with your claim so that the process can be completed quickly and easily. You can make it easier for your family to deal with your claim by keeping your policy documents somewhere safe that your family can access. Be sure to let someone know where they are so that they can find them if you pass away. It's a good idea to keep your policy documents with other important documents that might be necessary for organising your estate.

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