Family Income Benefit
What is a Family Income Benefit insurance policy?
Depending on the makeup of your family and your finances you may find it beneficial to leave your partner with a monthly income to cover all the costs involved in running a house and raising a family.
A lot of people have Life Insurance for their mortgage balance but may not consider that even without a mortgage there are still a lot of bills to pay and costs that need to be covered.
Family Income Benefit is a type of life insurance that is set at an amount agreed between yourself and your adviser. This can be set to completely cover the running of the house, allowing the remaining partner the chance to take time off to look after the kids.
It might be an amount to make sure that future schooling is covered, or even just a small amount to ensure the impact is minimised.
The cost of this can be very reasonable and definitely worth a conversation.
Who needs Family Income Benefit?
Family income benefit is suitable for families with young children or where one person of a couple is the primary earner.
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Family income benefit will pay your dependents a tax-free monthly income. It may be used to cover anything from childcare and regular bills to mortgage/rent payments and other credit commitments.
How does Family Income Benefit work?
A family income benefit policy only pays out if you die during the term of the policy.
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For example, if you took out a 25 year policy and died after five years, your insurance provider would pay an income for the remaining 20 years.
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This is different to a traditional life insurance policy, which pays out an agreed lump sum when the policyholder dies.
How much cover do you need?
You need a policy that covers your main expenses to ensure that you don't leave your loved ones with bills they cannot pay on the remaining person's income alone.
