UK Life Insurance Articles
search advanced search

Home >> Life Insurance Articles

What is Family Income Benefit Life Insurance?

Article by Simon Christopher
Article added: 29/6/2005 - Last updated: -
Rating: 3.67 3.67 (9 votes)

Family Income Benefit is one of the least expensive forms of Life Insurance and differs from most other types in that it is designed to pay the benefit as an income rather than a lump sum.

Low Cost Family Protection
The fact that the amount of cover (sum assured) is paid in regular instalments means that the risk to the Insurer is decreasing over the term chosen which makes Family Income Benefit cheaper than Level Term Life Insurance where the risk to the Insurer is the same throughout the term of the plan.

Regular Tax Free Income Payments
In the event of a claim, income can be paid monthly, quarterly or annually and under current rules the income is tax-free. This makes it ideal for Family Protection where a family are looking to insure the main bread winner over a specific term, for example to his or her retirement age.

Extra Cover Options
Family Income Benefit can also include Critical Illness Insurance which is designed to pay the selected income if the policyholder is diagnosed with a Critical Illness within the chosen term. Critical Illness conditions vary from insurer to insurer but in general include such conditions as Cancer, Heart Attack, and Stroke etc. In addition to these “Core Conditions” applicants can also select comprehensive cover which usually includes 25 to 30 additional conditions.

Although Level Term Life Insurance is perhaps the most popular choice for Family Protection, the difficulty for most successful claimants is how to generate an income from the cash lump sum. For simplicity most people tend to place the proceeds of the policy in a Bank or Building Society deposit from which they take a regular amount of interest as income. The problem with this is that the interest generated may be subject to tax and will have to be declared via Self Assessment.

Family Income Benefit therefore should be considered when looking to effect insurance for Family Protection. Family Income Benefit is a low cost, tax efficient solution to Family Protection.

PLEASE NOTE: The guidance published in this article is for information only and does not constitute financial advice or a recommendation of any particular life insurance policy or provider. If you are in any doubt please consult an independent insurance adviser. A database of advisers in your area is available at

Copyright UK Insurance Index All rights reserved.

comments about this life insurance article

Comments About this Article:

 Add a Comment

Helpful introductory overview, particularly about the tax benefits and why it's cheaper than standard life cover.
Comment by Phil
Date: 5/8/2009

share this life insurance article

Share this Article:

rate this life insurance article

Rate this Article:

Please rate this article between 0 and 5
with 5 being top.
All ratings received for this article.

all categories ALL CATEGORIES
A-Z Categories

popular categories POPULAR CATEGORIES
Car Insurance
Home Insurance
Life Cover
Mobile Phone Cover
Pet Insurance
Travel Insurance

directory categories DIRECTORY CATEGORIES
Home & Property
Insurance Brokers
Life & Protection
Non UK Insurers
Pet & Animal
Personal Possessions
Specialist Cover

review categories REVIEW CATEGORIES
Car & Motor
Insurance Companies
Life Cover
Pet & Animal

article categories ARTICLE CATEGORIES
Car & Motor
Home & Property
Insurance Awards
Insurance Guides
Life Cover
Pet & Animal

news categories NEWS CATEGORIES
Business News
Car and Motor News
General News
Health News
Home & Property News
Life Cover News
Pet and Animal News
Travel News


latest listings LATEST LISTINGS
Beagle Street
ActiveQuote Life Insurance Quote
London and Cover
Sun Life Insurance
ASDA Over 50s Life insurance

latest reviews LATEST REVIEWS
Scottish Provident Critical Illness
LifeSearch Life Insurance Life Insurance
Friends Provident Life Insurance
Engage Mutual Over 50s Life Cover

latest articles LATEST ARTICLES
How Much Life Insurance Should You Have?
What is Family Income Benefit Life Insurance?
Choosing a Life Insurance Company
How Does Life Insurance Work?
Tips for Buying Life Insurance

Home | Privacy & Cookies | Terms of Use | Contact |

Page protected, do not copy

This website uses cookies to ensure a reliable browsing experience. If you continue to use this website you are consenting to us using cookies in this way. To find out what cookies are, which ones we use and why we use them please click here.

Copyright © 2019 UK Insurance Index. All rights reserved.
All directory listings, articles and reviews are provided as information only and do not constitute advice or a recommendation of any product or provider. If you use these insurers, we take no responsibility and give no guarantees, warranties or representations, implied or otherwise, for the content or accuracy of these third-party web sites or companies. If you have any doubts you should consult an authorised independent financial adviser for advice based upon your individual needs and circumstances. A database of advisers in your area is available at