Family Income Benefit
If the breadwinner in your family died, would the family be able to cope financially?
Hopefully there will be some life cover to pay off the mortgage. But what about providing for everyday items such as food, clothing and petrol or other expenses such as child care? The life cover will pay off the mortgage but where is your surviving family going to find the cash for everything else?
Tax free income...
The answer is Family Income Benefit - a tax free monthly or annual income which pays out on death of the breadwinner and can be a Godsend particularly if you have young children.
If you have been bereaved, the last thing you want is to have to get your head around complicated financial matters. So a monthly income, which should start paying out straight away, could seem like a life saver.
The idea is that Family Income Benefit should be arranged to pay out until the children have grown up, so it's often taken over a 10 or 20 year term, or whatever is appropriate in your circumstances.
Increasing income...
If you want the income received to increase each year, you can arrange for your policy to be index linked so that your monthly or annual income rises in line with inflation.
Some insurance companies also provide Family Income Benefit policies which will pay a monthly income in the event that the person insured suffers a Critical Illness rather than on their death.
This means that if you as the person insured have a serious illness such as a stroke, or forms of cancer and heart attack specified by the policy and are off work for months, the Family Income Benefit will kick in, either as an income or a one-off lump sum.
To get some friendly advice or get a quote click here.