Once you start a family you would always look out for the well-being of the family. One of the major concerns is always that if you meet with sudden death then what will happen to your family? Who will take care of them financially? If all these questions are swirling around your brain, you should get to know about family income benefit cover. A family income benefit is basically a life insurance policy which will pay an income to your dependents in the event of your demise. The income will be payable for the remaining time of your policy term. If you are a young family then these policies are suitable for you if you want to protect your dependents against loss of income.
You can add critical illness cover as a part of this policy. This is done to generate income if you get diagnosed with any serious illness. Here the person insured doesn’t need to die in order to have a claim. There are actually a number of reasons for which a family income benefit plan can be used. Firstly, these can be used as a component of divorce settlements. Generally couples who are getting divorced agree on payments of alimony and child support. However, in case one of the parents die while the children are still dependant, this benefit plan comes of use. Thus by having this policy the person who is receiving the maintenance payments is protected in case the insured dies before his children gain financial independence. Secondly, a family benefit plan is less expensive as compared to individual plans. However, if there are 2 individual policies offers double payouts in case both the insured die during the policy term.
The premiums of family benefit cover can be either guaranteed in which the amount is fixed from the outset throughout the life of the policy or you can review it from time to time, all depending upon your choice. The premium will depend upon factors such as the amount of cover you would require and also other things like your age, health and gender.
The benefit of family income benefit insurance policy is that your dependents will keep on receiving an income annually from the time of your death to the end of the term of the policy. This income will be tax free and there is no restriction on the purpose for which your dependents will be using the money. The premiums you pay is directly debited from your bank account and it is paid on a monthly or annual basis. Thus you don’t need to worry about your dependents having problems such as the house being taken away from them because of the inability to pay mortgage or them not receiving proper education because they cannot afford the cost.
Thus family income benefit cover ensures that even after you are gone, your family will be taken care of financially and don’t have to face extreme monetary problems.