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Family income benefit

Family Income Benefit is an innovative type of life insurance product, which is useful and extremely good value when compared to some other types of life or health insurance.

As with term assurance policies, family income benefit policies provide cover on death if you die during the policy term. But instead of a lump sum, it gives regular set payments (income) for the rest of the term of the contract. Premiums remain level throughout, and if you live beyond the end of the policy there will be no pay out. This means that it is an attractive product for those who would like to ensure that their family will maintain a regular income after their death, rather than a one-off payment, which could potentially be wasted.

As this type of contract only provides cover in the event of death, there is no surrender value. So if you stop paying the premiums at any time, your cover will stop immediately and you won't get any money back.

As it is a fixed term, there is no flexibility and you won't be able to increase cover or extend the term. If you become ill near the end of the term (duration of your policy) you might not be able to get further cover.

Income payments keep pace with inflation so you can usually have them increased as inflation rises. It's also possible to take a cash sum instead of the regular income option upon death of the policy holder.

Many policies now have additional features:
• If you can't work because of an accident or illness your contributions are paid for you.
• The policy will pay out if you are diagnosed as having less than twelve months to live.

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