Financial Dictionary.
This is a browseable and searchable reference tool for terminology relating to UK-based personal finance and financial products.
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Family Income Benefit
Definition: A derivative type of term assurance Term Assurance that pays out a fixed regular amount each year upon the death the life assured, until the expiry date of the policy. Such policies are generally used to cover additional family needs until a specified date - say when the last child has reached adulthood, or left university. Assuming that upon the death of the main earner an amount of £20,000 per annum would be required until the youngest child reaches 18, this amount can be insured upon the life of the main earner. Effectively, this has some similarities to a Decreasing Term Assurance, as the capitalised value of the sum assured is decreasing year-on-year, and this is reflected in the cost of premiums, which are usually lower than for conventional level term assurance plans. Under many plans, it is possible for the capital sum to be paid out instead of monthly or annual payments.