Family Income Benefit Insurance
Encyclopedia
Family income benefit insurance pays a monthly income if the policyholder dies whilst the policy is in force. The monthly income will continue at the level specified in the policy until the policy's termination date. These payments can either be index linked or flat rate. If the policyholder lives to the end of the policy’s term, no benefit is payable.
Family income benefit insurance policies can be held by one policyholder (a single policy) or by two policyholders (a joint policy). In the case of a joint policy, the policy will commence paying out at the death of either policyholder. If both policyholders die whilst the policy is in force, the policy will still only pay out once per month.
Family income benefit insurance is primarily used to ensure that a family’s income is maintained at an acceptable level if the main income provider or providers were to die. It can also be used within divorce settlements to ensure that agreed monthly support payment will continue until an given date.
Family income benefit insurance does not involve any investment and the policy has no surrender value at any stage.
Family income benefit insurance can also be combined with life insurance
, mortgage life insurance
and critical illness insurance
as part of a package of insurances to provide financial protection for the family.
Family income benefit insurance is popular in the UK but is relatively unknown in other parts of the world.
The sale of family income benefit insurance in the UK is regulated by the Financial Services Authority
.
Family income benefit insurance policies can be held by one policyholder (a single policy) or by two policyholders (a joint policy). In the case of a joint policy, the policy will commence paying out at the death of either policyholder. If both policyholders die whilst the policy is in force, the policy will still only pay out once per month.
Family income benefit insurance is primarily used to ensure that a family’s income is maintained at an acceptable level if the main income provider or providers were to die. It can also be used within divorce settlements to ensure that agreed monthly support payment will continue until an given date.
Family income benefit insurance does not involve any investment and the policy has no surrender value at any stage.
Family income benefit insurance can also be combined with life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
, mortgage life insurance
Mortgage Life Insurance
Mortgage Life Insurance is a form of insurance specifically designed to protect a repayment mortgage. If the policyholder were to die while the mortgage life insurance was in force, the policy would pay out a capital sum that will be just sufficient to repay the outstanding mortgage.Mortgage life...
and critical illness insurance
Critical illness insurance
Critical illness insurance or critical illness cover is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy....
as part of a package of insurances to provide financial protection for the family.
Family income benefit insurance is popular in the UK but is relatively unknown in other parts of the world.
The sale of family income benefit insurance in the UK is regulated by the Financial Services Authority
Financial Services Authority
The Financial Services Authority is a quasi-judicial body responsible for the regulation of the financial services industry in the United Kingdom. Its board is appointed by the Treasury and the organisation is structured as a company limited by guarantee and owned by the UK government. Its main...
.