This type of insurance policy is designed to provide a adequate income to help if joint or single partners die and they require income to provide for kids. 2 variables affect the quote price and these are chosen at the quotation stage and should be altered depending on your situation. The first is the time you want the family income benefit policy to run for. A term of 10 years will pay the monthly or yearly income for that time frame. However if you died at year 5 the family income benefit policy will only pay out for the next five years on a 10 year term. It is designed to give you maximum cover at the cheapest price at the time you need it.
For example you have a new born child. You could say that cover would be required for 16 years. You might set the term for the family income benefit policy for 18 years. You die 10 years in and the policy would only pay out for 8 years. However after the 8 year period the need for income ceases as the child is now able to earn income by themselves.
The other variable is the sum assured. Unlike a term life insurance that pays out a amount of cash the sum assured will be set at the yearly income required. The family should already have or take out adequate insurance to pay off mortgages and loans therefore the income required can exclude these commitments. Family income benefit amount should be set to the amount the family will need with one partners income missing.
The best thing of family income benefit verse term cover is that amounts insured and income cannot alter. Unlike term insurance amount paid out would be invested to provide yearly income and therefore the income is variable and depends on the stock market. Another problem with using a lump sum to provide income is that normal people are not experts in stocks and shares and many will waste the amount of the claim as the temptation even for the disciplined to buy cars or holidays can be to hard to stop.
To summarise family income benefit can form a very important part of life insurance and protection planning. Used with level and decreasing life insurance policies to protect loans and mortgages. It also compliments critical illness policies and income protection quotes. Your best advice and solution is to speak to a insurance adviser to help protect your family.