The idea
Replacing a wage, not clearing a debt
A lump sum is the right tool for clearing a mortgage. It is a less obvious tool for replacing the weekly reality of a salary, particularly for a family who have just lost someone and are not in a state to make investment decisions.
Family income benefit pays out monthly, so it behaves like the income it is replacing. Set the term to run until the youngest child finishes education and you have covered the years that matter most.
The economics
Why it costs less
Because the total paid out reduces as the term runs down, family income benefit is generally cheaper than level term life cover for the same monthly figure. A claim in year two pays for eighteen years. A claim in year seventeen pays for three.
That makes it an efficient way to cover the specific period when your family is most financially dependent on you, and it often sits alongside a separate decreasing term policy covering the mortgage itself.
Cover is subject to underwriting. A policy will not pay out if premiums are not maintained.