Family income benefit provides peace of mind for families and their dependants by paying out a regular income, rather than a lump sum from the time the claim is made. It can provide an income to help with modern day costs such as maintenance payments for children or education fees. It also avoids the difficulty of having to deal with a potentially large sum of money during an emotionally difficult period.
As the economic instability remains in the UK the security offered by this kind of product is becoming ever more popular as consumers seek products that are flexible and that suit their long term needs. It also comes at a cheaper price. For example, a 39 year old male who is a non smoker, with a mortgage of £150,000 for a 20 year term, would be paying a current monthly premium of £71.86 to receive the benefit as a lump sum in the event of his death or critical illness. Alternatively, if he opted to take out the full income plan for his family they would receive a monthly income totalling £7,500 a year for 20 years at a monthly premium of just £29.64 – a saving of £42.22, or 59%.
Susan Barclay, head of marketing at Scottish Provident, said: “‘The four-fold increase shows that people are increasingly concerned about ensuring their family’s financial safety should their main income be cut short due to death or illness.”
The family income benefit protection plan can be further supported by adding on various benefits to the scheme. These include an option to provide an income following unplanned redundancy; a buyback option, which provides further critical illness cover following a claim; and a premium payment benefit, which includes a waiver of premium options for sickness/accident or unemployment.
Susan Barclay continued: “Budgeting for the future involves creating a sensible financial plan, while not sacrificing valuable cover that may be vital in protecting a family in both the short and the long term.”