Family income benefit insurance is a fairly lesser known cover that promises features that are worth considering. The passing away of the bread winner of the family turns out to be extremely tumultuous for family members not only in terms of dealing with the loss but also in managing expenses. As the main breadwinner of the family you might as well have taken due measures to protect your family members from every potential threat- be it monetary or anything else. A family income benefit cover, if chosen wisely, ensures that your family remains well provided for even after your death. Here are a few reasons why you should consider the policy:
Mode of Payment
After the death of the insured, the policy pays out the benefits as a fixed monthly income and not as a lump sum, to the nominees. The absence of a lump sum might not be viewed favorably by many. However, if considered wisely, you will easily be able to establish the major demerit of a lump sum. A young family or a family that is not used to handle finances finds it difficult to control their expenses without a wise guardian to guide them, when they are handed over with a hefty amount of money. A fixed monthly earning, (meant to replicate the kind of income the insured had) on the other hand, ensures that members spend according to the earning that they receive.
Critical Illness Cover
A critical illness cover can be added if the policy holder is diagnosed with a critical illness. In that case he will receive payment during his treatment and his family will receive the benefits after his death, as well.
The family income benefit insurance can be secured both by single and joint applicants. In case you are a couple, mulling an insurance cover for your children, it would be better if you opt for two single covers instead of a single joint cover. Two single plans might prove costlier than a joint cover. But your children will be entitled to more money in case you opt for two single plans than a joint one.
Some of the companies might as well provide you the waiver of premium feature whereby the insured is unable to work owing to an illness or disability and hence can’t pay the premiums for a period of more than 26 weeks (generally). However you should find out about the same from your insurer.
Please remember that the policy provides protection only when the insured dies within its term. It implies that if the policy holder has chosen a cover for 15 years and dies within these years then only will the family receive the benefits otherwise not. Additionally, also keep in view, that choosing family income benefit insurance requires you to exercise due sagacity in a bid to make sure that your family members don’t have to compromise on the lifestyle that are used to, after your death. Do conduct due research before settling for a policy.
Author Bio: Sam Payn is an avid industry blogger whose well-researched finance write-ups have made way to various web portals. He is equally fluent in writing travelogues as well. At present he writes for www.relevantlifepolicy.com