Family Income Benefit
Family income benefit pays your family a regular monthly income, rather than one lump sum, if you die during the policy. It's built around a simple idea: replace the money you'd have brought in, for as long as your family would have needed it, rather than handing them a single amount to manage all at once.
Get a no-obligation quoteWhat it actually is
A wage, not a windfall
Instead of paying a lump sum like standard life insurance, family income benefit pays a monthly income from the date of a claim until the end of the policy term — so a 20-year policy with a claim in year five would pay 15 more years of monthly payments. Because the total an insurer expects to pay falls the later a claim happens, this type of cover is often cheaper than an equivalent lump sum policy providing the same monthly income. The trade-off is flexibility: a lump sum can be used however your family chooses; a monthly income is paid in instalments, though some policies do allow it to be taken as a lump sum instead.
Who needs it
This is probably for you if…
- You have children and want their day-to-day living costs replaced, not just a one-off payment
- You'd rather your family received a steady income than had to manage a large sum themselves
- You're working out cover for the years until your children are financially independent
- You want more cover for your budget than an equivalent lump sum policy might stretch to
- You already have life insurance for the mortgage and want income cover for everyday living costs on top
Sound like you?
If any of that struck a chord, the next step is a short conversation. I'll tell you honestly whether family income benefit is what you need, and what it'd cost to arrange.
What it costs
What shapes the cost
The main factors are your age, health, the monthly income you choose, and the length of the term. Term is usually the interesting decision here — most people set it to run until their youngest child reaches an age they'd expect to be financially independent, often somewhere around 21, rather than picking a round number. A shorter or longer term changes both the total protection and the cost, so it's worth talking through what age actually makes sense for your family rather than guessing.
See what drives the price of family income benefit→I compare cover from leading UK insurers.
- Vitality
- Scottish Widows
- Zurich
- Legal & General
- Aviva
- Guardian
- MetLife
- The Exeter
- LV=
- Royal London
Questions people ask
Straight answers, no jargon.
How is family income benefit different from ordinary life insurance?
Ordinary level or decreasing term life insurance pays a single lump sum if you die during the policy. Family income benefit instead pays a regular monthly income from the date of the claim until the policy ends. Both protect your family financially — the difference is whether they receive one payment to manage or a series of payments spread over time.
Why is family income benefit often cheaper than a lump sum policy?
Because the total the insurer would pay out reduces the later in the term a claim happens — a claim in year one means many years of payments left to make, a claim near the end means only a few. That declining total cost is reflected in the price, which is why family income benefit can work out cheaper than a lump sum policy providing broadly similar protection.
How do I choose the right term?
Most people link it to their children, running the policy until their youngest is likely to be financially independent, commonly somewhere in their early twenties, which covers the period they're most likely to depend on your income. There's no fixed rule, so it's worth working through your own family's situation rather than picking a number that sounds right.
Can my family take the money as a lump sum instead of monthly payments?
It depends on the insurer and the specific policy — some allow the remaining income to be converted into a single lump sum at the point of claim, others pay monthly only. If having that flexibility matters to you, tell me and I'll make sure it's a feature of whichever policy we look at.
What happens to the payments if my children grow up before the term ends?
The policy pays out according to the term you originally chose, regardless of your children's ages at the point of a claim — the family income framing describes the typical reason people buy it, not a condition on how the money is used. Your family receives the monthly income for whatever's left of the term and can spend it on anything.
How do you get paid, and are you tied to one insurer?
My advice costs you nothing. My commission is funded by the insurer if you decide to go ahead with a policy, and it doesn't change what you pay. I compare cover from leading UK insurers.
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