Family income benefit vs life insurance in the form of level term cover comes down to how the money arrives: family income benefit pays your family a monthly amount until the policy ends, while level term pays one lump sum, whenever in the term a valid claim is made. An FCA-authorised broker can set family income benefit and a lump sum side by side on your own details, free of charge, after the form on this page comes through.
Both are term life insurance, so this page sets the two side by side and recommends neither. What the monthly cover is has its own guide, family income benefit explained; here the focus is the contrast with a lump sum.
How is the money paid under each shape of cover?
MoneyHelper's guide to life insurance (archived August 2025) notes that the payout can come as a single sum or as regular payments after your death. Zurich's Personal Protection key features (PW720494014 04/26) offer both on one policy: a one-off lump sum, or monthly payments that Zurich calls Family Income Cover. The table sets out the two shapes as the insurers named describe them.
| Family income benefit | Level term, lump sum | |
|---|---|---|
| What is paid | A monthly benefit for the remaining term of the cover (Aviva) | The amount of cover, in full, once (L&G) |
| Does the total change? | Yes: a claim late in the term leaves fewer months to pay (Aviva) | No: the payout stays the same throughout the term (LV=) |
| Value if no claim is made | None unless a valid claim is made (Aviva) | None, and no payout if the term ends with no valid claim (L&G) |
| Switching shape | Aviva allows a request for a lump sum, smaller than the payments left | Already a lump sum |
How the total shrinks through the term is worked through in the explainer, and the switch to a lump sum has its own page, family income benefit as a lump sum.
What makes the price of each differ?
Zurich's key features answer the question of what the policy costs with one list that applies whichever way the policy pays: your personal circumstances, including your age, health, occupation and tobacco use, then the amount and type of cover and any options, then how long you want the cover to last. MoneyHelper's list adds family medical history. So smoking, health and a longer term usually push either shape up, and buying younger usually costs less.
The gap between the two shapes is harder to pin down. A Royal London Q&A written for financial advisers only (PDFP8PD0014, February 2020) answers an adviser who asked whether a webinar should have set family income benefit (FIB) against decreasing term assurance (DTA) rather than level term. The level-term comparison was only an illustration, it replied, and "If FIB and DTA was compared the difference in the price would be much smaller." In other words, how far apart the monthly and lump-sum versions sit depends on which lump-sum shape you set the monthly one against. For the lump-sum side, see level against decreasing term.
Options change the premium too. If you choose Aviva's increasing (inflation-linked) family income benefit, its key features say the premium rises each year: "It’ll increase by a higher percentage than the amount of your insurance, because you’re more likely to claim as you get older." To see both versions on your own amount and term, a broker can phone you at no charge once your contact details are in the form. Comparing family income benefit quotes covers what to line up.
Which needs does each one fit?
The insurers describe the two for overlapping jobs. Aviva says its monthly benefit can help a family pay outstanding debts or put money towards the mortgage. L&G says the cash sum from a level policy "could be used for any purpose, for example to cover the mortgage, childcare costs, school fees or unpaid bills". MoneyHelper puts the choice as whether the cover is for specific payments or "to leave your family with an inheritance".
So the difference is less about what the money is for than about the shape of the cost it meets. LV= notes that level cover may suit interest-only mortgages, "where the amount owed does not reduce", which is a debt of one fixed size. A cost that recurs every month and stops on a known date, such as childcare until the youngest is independent, is the other kind of need. Questions worth weighing:
- Is the need a debt of a fixed size, or an outgoing that recurs each month?
- When does it end, and does that date match a term you could choose?
- Would the household prefer a single sum to manage, or regular payments?
Sizing is a separate step: how much family income benefit you need and what a level term policy is take it from there, and life insurance for a family compares the wider choices.
What are the advantages and disadvantages of each?
These points come from the insurers' own documents, so each belongs to the insurer named rather than to every policy.
Family income benefit
- For: Aviva pays the monthly benefit for the remaining term, and you or the people looking after your estate can ask for a lump sum instead.
- Against: that lump sum "won’t be as much as the remaining monthly benefit payments added together", the total falls the later a claim is made, and the inflation-linked option raises the premium faster than the cover. Aviva adds that inheritance tax may apply if the money ends up in your estate; family income benefit in trust covers the trust route.
Level term, lump sum
- For: LV= says the family knows the payout stays the same if a valid claim is made in the term, and L&G lists protecting a range of expenses.
- Against: L&G lists that a decreasing policy of the same size can cost less, that "Any payout doesn’t increase with inflation", and that the payout could be subject to Inheritance Tax, which it says placing the policy in trust can manage (see whether life insurance needs a trust).
As the table shows, neither builds up a cash value. Whether the income or the sum fits one household better turns on the questions in the section above.
Frequently asked questions
Is family income benefit worth it?
That depends on what the money would be needed for, for how many years, and what the monthly and lump-sum versions are quoted at for your age, health and term. Whether it is worth it for one household is a judgement about its own costs and dates, which neither policy's terms settle.
Is terminal illness covered under both?
Aviva's family income benefit and L&G's level cover both include it, each on its own definition. Aviva says a claim "can be made where you’ve been diagnosed by a medical consultant with an illness that is expected to lead to death within 12 months", and L&G's level cover uses a similar 12-month test. Terminal illness benefit explains it.
Can you hold both kinds of cover at once?
Aviva's types-of-life-insurance guide (updated 3 August 2026) confirms one person may hold several types of policy at once. Whether a particular combination is accepted is for the insurer to decide on your application.
Ready to see both on your own figures? Leaving your details in this page’s short form brings a free call from a broker.
Sources
- MoneyHelper, What is life insurance? (archived copy captured 3 August 2025), read 26 October 2026. web.archive.org (moneyhelper.org.uk)
- Zurich Assurance Ltd, Key features of the Zurich Personal Protection policy (PW720494014 04/26, hosted on Zurich's intermediary website), read 26 October 2026. zurichintermediary.co.uk
- Aviva, YourLife Plan Family Income Benefit key features (EDCO0871-0126, January 2026), read 26 October 2026. protection.aviva.com
- Aviva, Types of life insurance (last updated 3 August 2026), read 26 October 2026. aviva.co.uk
- Legal & General, Life Insurance and Critical Illness Cover Policy Summary (QGI14786 2026/10), read 26 October 2026. legalandgeneral.com
- Legal & General, Types of Life Insurance (19 June 2026), read 26 October 2026. legalandgeneral.com
- LV=, Level or decreasing life insurance: What’s the difference? (last updated 29 July 2026), read 26 October 2026. lv.com
- Royal London, The value of family income benefit webinar Q&A (PDFP8PD0014, February 2020; adviser use only), read 26 October 2026. adviser.royallondon.com