Query about Family Income Benefit Policy

Saturday, February 23, 2013

Query about Family Income Benefit Policy

Family Income Benefit Policy is an affordable way to protect your near and loved ones in case there is an unfortunate incidence of death or serious illness in your family. This policy has been designed to protect households from loss of income. Before buying an insurance policy, you should have a clear understanding about the benefits and features of that policy. Now, there are questions you should ask to an insurance provider prior to choosing a family income benefit protection to ensure it is actually benefiting you. Some of these commonly-asked questions with their own answers are given below. See if they can help you choose a good policy.

Why should you think about Family Income Benefit Insurance?

These policies are reasonably priced and are ideal for individuals who are looking for a specific amount of earning after the policyholder dies or become critically ill. It saves the family from loss of income, and the most beautiful part of this policy is that you don’t need to spend an enormous amount for getting the benefit. 

Family income benefit insurance is also beneficial in contracted income after a marital separation or divorce, is continuously paid after the expiry of the person who has been generating that revenue. By using this means the surviving spouse can bring up her kids to finance their tuition costs till the time, they grow up and start earning money.   

What are essentially the categories of Family Income Benefit Cover?

These covers can broadly be categorized into:
  • Increasing benefit plans
  • Level benefit plans
Is the income provided by this cover tax-free?

Yes, the income that your family receives from this policy is tax-free. 

How does Family Income Benefit Cover differ from other life insurance policies? 

Family income benefit works as a source of income replacement after a death or serious illness. The main objective of this kind of policy is to improve the survival of the family members by offering financial assistance on a regular basis. On the other hand, a one-time amount is offered by term life insurance policies once a claim is made. This vast amount can be used for repaying debts and financial obligations like mortgage loans and other loans.

Why including critical illness insurance is beneficial for you?

Life is full of uncertainties and it may happen that you become seriously ill, and you still continue to live and recuperate from your ailment. This is not unfamiliar with the kind of technological advancements taking place at present. Nonetheless, your family will still require an income for fulfilling regular expenses during the time of your recuperation.  This is the reason why you need to incorporate a critical illness cover in the policy. 

Family income benefit policy is a sure-fire way to continue your family income at a consistent level and get support during financially adverse periods.

How can you increase benefit?

The benefit can be enhanced if the insurance provider is willing to raise the cover after taking into consideration price increase or inflation. This type of policy is often known as an indexed policy. The value can also be enhanced on the basis of a fixed ratio.

Author bio: 

Sam Payn is a blogger who always writes about insurance, retirement funding and annuities.

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