What is a family income benefit policy?
What is it?
It is a term life insurance policy that pays out an income, rather than a lump sum.
These policies are not very common, so you may have to go through an independent financial adviser or broker to find a policy that offers an income payout.
How does it work?
You choose an annual benefit and a duration for the policy, known as the term.
If you die during the term, your insurer will pay the income you choose to your loved ones for the remaining duration of the policy’s term.
For example, if you took out a 30 year policy and died after 28 years, your insurer would only pay an income for the remaining 2 years.
This differs to a lump sum payment on a life insurance policy, where you choose a larger amount as a one off payout.