Family Income Benefit

You probably bought cover to protect your house - how about everything that makes it a home?

  • Family Income Benefit helps you look after your family's living costs if something happens to you.
  • It’s one of the best value ways to protect yourself against death or critical illness.
  • Avoids having to invest lump sums of Life Insurance - It pays out a tax-free income and avoids investment fees, charges and tax.

Think Life Insurance - but instead of a lump sum pay-out, your dependants receive a tax-free monthly income over a period you choose. It's ideal for young families, and for those who need a lot of cover at low rates.  Money is paid in easy, manageable  payments that won't run out too early.

We'll find the best cover for you.

Family Income Benefit is a type of Life Insurance, so it pays cash if you die. But unlike traditional policies which normally pay a lump sum, Family Income Benefit pays a monthly income. This has two big advantages:

A lump sum big enough to provide for a young family's future is likely to be very expensive to buy - a Family Income Benefit policy that provides an equivalent income is likely to be much, much cheaper.

Managing a lump sum pay-out to provide an income is a hassle. It requires complicated investment decisions and often incurs fees, commission and tax. Family Income Benefit avoids all that.

When you buy a Family Income Benefit plan, you decide how much income you want for your dependents each year, and how long you want that protection to last from the date you buy the policy. For example:

Cathy and Mark live on Mark's salary. They have two young children and decide they need an income of £25,000 for 25 years. Hopefully, Mark will always be around to earn his salary, but in case he isn't, the couple buy a Family Income Benefit policy. This means:

  • If Mark were to die just moments after they first buy their cover, Cathy and family get £25,000 each year for the 25 years that have been covered.
  • If Mark dies 10 years after buying their policy, Cathy and family are paid £25,000 each year for 15 years - the remaining 15 years of the policy.
  • If Mark doesn't die at all during the 25 years of the policy, there's no pay-out.

Like Term Life Insurance, Family Income Benefit only pays out during the insurance period - it's there to make up for the financial loss a death can cause.

Did you know ?

"There's a long-standing rumour Family Income Benefit is the most popular insurance policy bought by young financial advisers. It's certainly popular at LifeSearch - and one of the types of policy we recommend most!"

Paul Fewings - LifeSearch Adviser

Most asked questions

If someone dies halfway through the term of a FIB policy, the number of monthly payments is half the maximum, whereas traditional Life Insurance makes the maximum pay-out whenever someone dies. However, while the cost to the insurer is less, the difference to the insured might only be marginal if they're looking for their cover to provide an income.

They're two very different policies with very similar names. Family Income Benefit pays beneficiaries after the insured person dies, whereas Income Protection protects an insured person's income if they're unable to earn due to illness or accident (but are still alive).

It's usually a good idea to get a policy that will keep track of rising prices, especially if there's a chance it'll be paying out over a long period of time. We'll compare policies that maintain their buying power and those that don't, and help you choose the one that best suits you.

No. Family Income Benefit is designed to protect your family if you die, so your family won't need protecting if you don't die. (In the same way, car insurance won't pay out if you don't have an accident and pet insurance doesn't pay if your pet stays well).


Although it's paid as an income, Family Income Benefit is paid completely free of income tax.