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Family Income Benefit Insurance 2012 and tips

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Family Income Benefit Insurance 2012 and tips Powered By Docstoc
					The best way to illustrate difference is to through an example. For
instance Mr White takes out a £250000 level term insurance policy on a 20
year term to protect his family, because he has dependent children of a
young age. Mr Black decides to take out a family income benefit insurance
policy for £15000 per year over same term of 20 years, to provide cover
for his own young family.
However, though £ 15,000 per year will add up to £300000 over the term of
20 years, this does not mean this amount will be paid out. If the cover
pays out the first year this is fine £15000 will be paid for every year
left on the policy i.e. 20 years. But what if Mr Black dies 18 years into
the policy term, then only £30000 would be payable over the remaining
period of the policy i.e. 2 x £15000. However if Mr.White died in the
first, second or last year of his level term policy, his family would
still receive £ 250000 as it does not matter so to speak when he dies,
the level lump sum will pay same amount within the policy term,£250000
So you can easily work out from the example above that family income
benefit insurance is a form of decreasing term assurance under another
name. Who would buy family income benefit and why? Well people who want
to save on life policy premiums might consider buying this type of cover.
The price is usually lower than level term assurance, because the benefit
is reducing each year as we have seen in our example above. Hopefully you
will now see the difference between the two insurances and from our
example, be able to decide what type of policy you need or want. It all
comes down to cost and what you need life cover for in the first place.
If you are on a budget then family income benefit is an option to
consider, but compare it against other types of cover first, before
deciding.

				
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Description: Family Income Benefit Insurance 2012 and tips