As an option to taking a term life insurance which pays out a lump sum on death, it is possible to have a policy that pays out regular, tax-free, monthly income to your dependants – from the time of the claim to the end of the plan term. This type of policy is called Family Income Benefit because it is intended to replace the income which the life assured would earn for their family if they were still alive. The term of policy payout is decided on the onset of the policy.
For example: Plan Term – 25 years. Time claim made – after 15 years. Benefits paid – for the remaining 10 years. For this reason, Family Income Benefit often costs less than life insurance.
This policy can be taken as Increasing Family Income Benefit, where the income benefit increases automatically, at a prearranged rate, during the term of the policy