The ins and outs of Family Income Benefit Insurance

bulram | March 18, 2013

Family Income Benefit Insurance

Family income benefit insurance is something that is paid off to the family of a policy holder after he passes away.

As against a conventional insurance, this one offers tax-free monthly income for the beneficiaries of the insured. Let us discover the things you need to know about Family Income Benefit Insurance:

It is very good for young families: People who want that there should be a fixed tax free monthly income for their beneficiaries like young widows or children should seek the benefits of Family Income Benefit Insurance. A lump sum may mean that the beneficiary has the liberty to spend thoughtlessly. It is only natural that someone very young can lose track of the savings thereby ending up spending a lot of the money received after an insurance claim. It would also not always be possible for that person to invest in complex schemes further. On the other hand a regular monthly income would mean that both the expenses are savings are regularized.

Left over tenure: As the policy seeks to compensate the income losses of families, it is paid off on a regular basis (not as a one -time amount as you must have gauged by now from the point mentioned above) for the left over period of the cover in the event of the policy holder’s death.

Same amount: The amount of the cover does not fluctuate with the age of the policy holder. It stays the same throughout the term.

Flexibility: This policy can be sought both individually and jointly. One can choose accordingly from a single life cover or a joint life cover. The Family Income Benefit Cover though covers both the individual and joint insurance seekers; the money will be given only once.

Online availability: One can seek this insurance online as well. However do not forget to spell out the Family Income Benefit Quote in that case.

Other characteristics of Family Income Benefit Policy:

The policy comes with zero survival benefit
Generally you will have no choice in extending the tenure of the cover
It is advisable that you avail this insurance only after conducting considerable market research and survey— here you should compare the premiums offered by several carriers thoroughly
For its regulatory nature (here it refers to the fact that is given out as a monthly income and not a lump sum), it can safely be considered a low cost best value protection cover
There is also a choice to convert the regular earnings into a onetime amount, but you have to make a claim for that
The policy does not entail an investment component
You might become ill at the fag end of the coverage (before it is over), in that case you will be denied the benefits of an additional coverage
The amount of the premium though remains the same, initially the premium will depend on length of policy, health situation, gender etc

Conclusion

Now that you have a fair idea of the several aspects of a Family Income Benefit Policy you can easily avail them after making due calculations from your end. However if you are availing services of the online insurance providers, you should follow the tips provided above. Additionally try to establish the authenticity of the site in order to avoid unsafe transactions. Doing online research will rid you of the strenuous physical journeys to the loan offices but don’t shy away from doing the additional survey required for doing online transactions.