Family Income Benefit Insurance

What is family income benefit insurance?

Family income benefit life insurance is a type of term life insurance that pays out a regular income, rather than a lump sum of cash. 

How does family income benefit insurance work?

You choose the term length and annual benefit and if you die during the term, your insurer will pay a regular income to your family for the remaining duration of the policy’s term. For example, if you take out a 20 year policy and die after 15 years, your insurer will only pay an income for the remaining 5 years.

How much does family income protection cost?

The cost of family income benefits differs depending on a variety of factors including your age, your lifestyle and how much annual income you want as a payout. Your premiums will be more expensive the older you are and they’ll also increase if you choose a higher annual income.

Family income benefit vs level term life insurance

A family income benefit policy is typically cheaper than a level term insurance policy because the amount the insurer pays out decreases over the policy’s term.

Family income benefit

What are the pros and cons of family income benefit insurance policies?


  • Gives your family a regular income in the event of your death
  • Premiums are often low and affordable
  • Avoids the complications of managing a large lump sum of money


  • Only pays an income if you die during the term
  • Not suitable for clearing large debts
  • You can’t claim any money back if you don’t die during the term
  • Only pays out the remainder of the term, which could be as little as a few months

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