Family Income Benefit
This type of cover is often forgotten, Family Income Benefit protects a fixed level of income over a set period of time. In the event of death, the chosen level of income will be paid for the remainder of the term of the plan. This protection is typically set to cover you until your youngest dependant turns 21.
Dependent on your circumstances, indexation may be an option for this type of protection to cover the purchasing power, although the benefit can be level. If indexation is initially selected, the premiums and benefit would rise annually, typically by RPI.
This type of insurance is one of the more inexpensive forms and is different from most other types of insurance in that it is intended to pay the benefit, as an income rather than a lump sum. Some policies may offer the option of taking a lump sum.
Regular Tax Free Income Payments
Income can be paid monthly, quarterly or annually in the event of a claim and the income is currently tax-free. This makes it an excellent type of protection to cover a family where they are looking to protect the main provider over a specific term e.g. to his or her retirement age.
Extra Cover Options
With this type of insurance, there is an option to include critical illness cover which means that the set benefit amount would be payed out if the policyholder is diagnosed with a critical illness within the term for the policy. Every insurer covers different critical illnesses. Family Income Benefit is a low cost, tax efficient solution to 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.