Family Income Benefit

Family income benefit is a type of cover that pays out on death. Some plans pay upon earlier confirmation of a terminal illness where the prognosis is death within 12 months. You can expect to see this paid out as a lump sum, or as income for the remainder of the policy term.

This cover will pay out if death occurs, and provides an income per year for the term remaining on the policy. For example, for a 20 year term, where the claim occurred after five years, there would be 15 annual payments made in total.

The payments are not normally subject to income tax but it is worth noting that it may impact some state benefits you are entitled to or currently receiving.