Family income benefit can be paid as a lump sum with some insurers: Aviva, Legal & General, Royal London and Zurich each print a way to swap the monthly payments for a single one when a claim is made. The lump sum is worked out as less than the instalments it replaces, and the rules on when and how to ask differ from one insurer to the next. On a level policy the monthly amount itself does not decrease; what falls over the term is the number of payments left, and with it the total.
Whether a policy you are considering allows the swap comes down to its wording, so it is worth checking before you buy. An FCA-authorised broker can check each quoted policy for a commutation option when they ring you back, free; the form on this page triggers that ring-back.
Is family income benefit a decreasing cover?
Family income benefit pays a monthly amount, and what shrinks is the number of payments still to come. Aviva says it will "pay the monthly benefit for the remaining term of the cover", and Zurich's terms (April 2026) say the sum assured is paid as a monthly income over the remaining term of the policy. A claim in the first year therefore sets off many payments and one near the end only a few, which is why how family income benefit works describes the total as falling with each month that passes. Zurich allows the monthly amount to be level or increasing, so the monthly figure need not fall at all.
That is a different shape from decreasing term cover, where one lump sum is scaled down on a schedule. Zurich's terms describe its decreasing option as a sum assured that reduces "taking account of a fixed interest rate"; what decreasing term life insurance means goes through it. Where family income benefit is swapped for a lump sum, though, the shrinking term does carry over: fewer months left means a smaller sum, as the next two sections show.
Which insurers print a lump-sum option?
| Insurer and document | Who can ask, and when | What the wording says about the amount |
|---|---|---|
| Aviva, YourLife Plan Family Income Benefit key features (EDCO0871-0126, January 2026) | "you or the people looking after your estate", at the point of claim or while monthly payments are being made | The lump sum "won’t be as much as the remaining monthly benefit payments added together"; Aviva explains the figure when asked to make the change |
| Legal & General, Family and Personal Income Plan policy terms (LG2030 2026/10, in its adviser area) | "you may request" the commuted lump sum; "you" covers a trustee, assignee or personal representative | Monthly benefit multiplied by the months left to the expiry date, then reduced |
| Royal London, Personal Menu Plan Life or Critical Illness Cover plan details (July 2025) | You or your personal representatives, when a claim is made or while it is being paid | Monthly payment multiplied by the months left, then reduced fairly and reasonably |
| Zurich, Personal Protection terms and conditions (PW720480017 04/26), Family Income Cover claims | The decision "can only be made at the start of the claim" | Calculated "on a fair and reasonable basis", less than the total of the remaining payments |
Four insurers is not the whole market, so read the version of the terms sent with any quote.
How is the lump sum worked out, and is there a discount rate?
Legal & General and Royal London describe the same two steps. First comes the full total of what is left, and then a cut. Legal & General says it will "reduce this total amount to reflect the fact that you would be receiving all of the monthly benefits due in advance". In effect the lump sum is discounted because the money arrives all at once rather than month by month.
A hypothetical example of the first step only: a monthly benefit of £1,200 with 96 months left to the end of the term gives £115,200 before any reduction (£1,200 × 96). The sum actually offered would be lower, by an amount the insurer sets.
What does each wording promise about that amount? Royal London says that if you ask it to work out a commuted value, "we’ll tell you how much this fair and reasonable reduction would be". Aviva says it will explain what the lump sum would be when asked to change the benefit. With Royal London at least, you can see the figure before deciding. How the reduction is reached for a particular policy is something the broker can explain when they ring back.
Who can ask once the policyholder has died?
Because the person who took out the policy may have died, the wording names who can act for them. Aviva and Royal London both mention personal representatives, the people dealing with the estate. Where a policy sits in trust, Aviva says it pays the benefit to the trustees, who then follow the terms of the trust; family income benefit in trust covers that side.
Personal representatives also have to prove their standing first: Aviva's cover details (EDCO1063_0126) want the original legal paperwork, such as a grant of representation, before paying them anything.
What should you weigh before swapping instalments for a lump sum?
- The sum is smaller. Every one of the four wordings says or implies a reduction, so the total received will be below the total of the remaining payments.
- Timing may be fixed. At Zurich the choice is open only at the start of the claim. Aviva lets you ask while payments are under way, and Royal London says it will consider a request then.
- Tax may differ. Aviva says "There could be tax implications of taking a lump sum instead of a monthly benefit" and recommends speaking to a financial adviser. How the monthly payments themselves are treated is on is family income benefit tax-free.
Which suits a household depends on what the money is for, and how much family income benefit you need starts from that monthly shortfall.
What if a policy does not offer a lump sum?
The option sits in each policy's own terms, so check them before you buy rather than at claim. The shape of the payout is also fixed at the start: Zurich says you can only select Family Income Cover when you first take out the policy. If a lump sum from day one matters more than a monthly income, family income benefit against life insurance paid as a lump sum compares the two shapes.
If you hold a quote and want to know whether it would let you commute, the insurer's commutation stance is something a broker can query for you without charge; mention it when the form on this page brings their call.
Frequently asked questions
Does family income benefit count as decreasing term assurance?
Not in the usual sense. Family income benefit pays monthly for whatever term remains, so the total possible payout shrinks as the term runs down. Decreasing term assurance pays one lump sum that is scaled down on a schedule.
Can the lump sum be taken after payments have started?
Aviva's key features say the request can be made at the point of claim or while it is paying a monthly benefit. Royal London says it will consider a request at either point, while Zurich's terms limit the decision to the start of the claim, so the answer depends on the insurer.
Sources
- Aviva Life & Pensions UK Limited, YourLife Plan Family Income Benefit key features (EDCO0871-0126, January 2026), read 27 October 2026. protection.aviva.com
- Aviva Life & Pensions UK Limited, YourLife Plan Family Income Benefit Cover Details (EDCO1063_0126, January 2026), read 27 October 2026. protection.aviva.com
- Legal and General Assurance Society Limited, Family and Personal Income Plan Policy Terms and Conditions (LG2030 2026/10, in its adviser area), read 27 October 2026. legalandgeneral.com
- Royal London, Personal Menu Plan Life or Critical Illness Cover: Plan details (July 2025), read 27 October 2026. royallondon.com
- Zurich Assurance Ltd, Terms and conditions of the Zurich Personal Protection policy (PW720480017 04/26, hosted on Zurich's intermediary website), read 27 October 2026. zurichintermediary.co.uk