When you start a family, your whole world revolves around your children. If something was to happen and you passed away, wouldn’t you want to make sure your family were taken care of financially?
Family income protection can make such a huge difference to your family’s living costs if you weren’t around. It is particularly suited to new parents who are looking for an affordable way to make sure their children will be financially looked after.
How does family income protection work?
As with most other policy types, you pay a monthly premium and set the term for the cover. The biggest difference is that while other cover, such as level term, pays out a lump sum, family income protection provides a regular, fixed income each month.
Consider how much income your children or other loved ones would require each year to help sustain their lifestyles and cover important bills; this ideally should include family living costs for now and in the future. When it comes to choosing the length of the cover, many people ensure the term runs until the kids are financially independent. We can help you with tricky decisions like these.
The pay-out from this type of policy can help with day-to-day living expenses. It’s important to remember that family income protection differs from standard income protection. The latter protects your income while you are unable to work due to illness, while the former offers financial support to your family if you pass away.
The cost of family income protection
How much family income protection costs is based on your personal information. This can include things like your age, if you smoke and your medical history. Without this information, it’s tricky to estimate how much your premiums will be.
However, you can decide on the amount of cover and the length of cover. Consider factors like utility bills, household running costs, any education fees and things like food shopping. Take some time to understand your monthly commitments and how much your family would need to cover them.
Should you get family income protection or term insurance?
The biggest difference between family income protection and term insurance is that term insurance pays out in one lump sum. Family income protection essentially provides a monthly income.
Both options are term-based, with the cover lasting for a fixed amount of time that you choose. However, you may not have to choose one or the other, as you can have multiple policies to suit your needs. For example, you might want term life insurance to help your family pay off the mortgage, while family income protection could ensure your partner and kids have a steady income for living costs.
The main things to remember are what you need the insurance for and what you can afford to pay in premiums each month. Our expert advisers can help you decide which policy is right for your family.
Family income protection vs critical illness cover
Many family income protection policies come with the option to add on critical illness cover. This means your family could start to benefit from the right cover if you fall ill and become unable to work. It’s worth noting that adding critical illness to your policy is likely to mean higher monthly premiums, as you have a larger amount of cover.
At Busy Bee Life Insurance, we can help you find quotes best suited to your circumstances. With a no-nonsense approach, our advisers can explain the right options for you and your family.