Family income benefit calculator

Family income benefit is term life insurance that pays your family regular payments, instead of one lump sum, if you die during the policy term. The income is paid until the end of the term, so more is paid in total if a claim is made in the early years than towards the end. This calculator shows that total for the monthly income and term you choose, and how it falls year by year.

The term is the years from your youngest child’s age today to the age when you’d want the income to stop. Guardian, Legal & General and LV= all offer terms from 5 years, and LV= up to 50 years, so the calculator uses a term of 5 to 50 years.

It counts whole policy years: a claim at the start of a year gets that year’s 12 monthly payments and those of every year left. Zurich’s own example adds up the payments in the same way, month by month: a policy paying £1,000 a month with 8 years and 2 months left pays £98,000 in total, or 98 payments of £1,000.

With a yearly increase, the income rises on each policy anniversary and keeps rising after a claim, as Aviva’s increasing family income cover does. The figures are in pounds of the year they’re paid. They aren’t adjusted for inflation or interest, and the amount of cover you choose is up to you. Everything is worked out in your browser: the figures you enter aren’t sent to us or saved.

MoneyHelper says the cover a parent needs depends on debts, mortgage or rent costs, current income and the number of children or other dependants. With family income benefit, that becomes two questions: how much your family would need each month, and for how many years.

For the monthly figure, add up what your household would still pay each month, such as the mortgage or rent, bills, food and childcare. Then take off income that would carry on, such as a partner’s pay. State support can help too. Bereavement Support Payment can go to a partner who is under State Pension age and was married to you, in a civil partnership with you or living with you as if married, if you paid enough National Insurance contributions or died because of an accident or disease caused by work. In 2026 to 2027, the higher rate is a £3,500 one-off payment and monthly payments of £350. A married or civil partner gets the higher rate if, for example, they were getting Child Benefit for a child living with them. A partner who lived with you without marrying can usually claim only if a condition like this applied. The claim must be made within 3 months of the death to get the one-off payment and all 18 monthly payments.

For the term, you might choose the age at which your youngest child should be independent. For comparison, GOV.UK says a child maintenance arrangement is needed for a child under 16, or under 20 if they’re in approved education or training. MoneyHelper gives the example of a separated parent whose policy on the ex-partner pays an income until child maintenance payments were due to end.

Insurers set their own limits on the income. Guardian’s minimum is £2,500 a year, Scottish Widows Protect starts at £5,000 a year and Legal & General’s plan pays up to £10,000 a month. The table further down lists what each insurer publishes. For a lump sum instead, the life insurance calculator adds up your mortgage, debts and income.

Several UK insurers offer family income benefit, under different names. The table lists what each one’s own documents say, in alphabetical order. It isn’t a ranking or a recommendation, and it doesn’t cover every policy on sale.

The details are from each insurer’s own pages and documents, checked on the dates in the Sources list. Insurers can change them, and the policy documents when you apply are what count.

HMRC’s Insurance Policyholder Taxation Manual says family income cover pays a series of capital sums on death, and that such payments are not treated as income. Legal & General says its payouts should be free from UK Income Tax and Capital Gains Tax, though the Government may change this, and LV= describes its benefit as a tax-free monthly income.

Inheritance Tax is a separate question. Legal & General says that if its Family and Personal Income Plan is written under a suitable trust, the cover paid on death should not form part of the estate for Inheritance Tax, and that without a trust it normally goes into the estate and Inheritance Tax may apply.

Because the income is paid over years, the money stays in the trust for longer. Legal & General says the potential for tax within the trust is higher for a policy that pays a monthly amount, such as its Family and Personal Income Plan. Our guide to life insurance in trust explains how trusts work, and is life insurance taxable? covers the tax rules.