A very difficult product to by is life insurance. Without a precise need for example of a loan, mortgage or inheritance tax liability, many people wonder about the amount of cover they should to take out for life insurance.

Beyond covering mortgages, loans and inheritance tax most people do understand that they need life insurance to cover their family. They do realise that they need to insure themselves against death to make sure that should they die there is enough money to pay out to their dependents so that they can continue to live the lifestyle that they have become accustomed to.

Providing an income to cover this subject matter, which is as near to ones current income as possible, is accepted by most people. Nevertheless, how is it possible for someone to insure against death with a plan which will supply an income equal to your current salary, without it being a lump sum.

There are preconceived ideas and complicated formulas used in the effort to make future projections and these are way off from being scientific. A ten times formula is recommended by many financial advisers which shows that if you earn 20,000 per annum then a lump sum of 200,000 per annum should be sufficient. Still this would all be reliant on various elements including inflation investment returns, so if the calculations are incorrect it would mean a deficit in the generated income.

With this in mind we need to find a solution and why. As the title proposes it is clearly the family income plan where we find the solution and this is because of how the family plan works. Contrary to regular life insurance which pays a block amount to the beneficiaries who then have to invest it in order to produce an income which they anticipate will be sufficient for the duration they need it, family income benefit simply pays out an income.

Family income plans are bought to protect an income rather than receiving a set amount of money. For instance, in order to protect 30,000 per annum income, take out 30,000 on a family income plan, instead of keeping in line with the formula which recommends buying 300,000. Including indexation benefit ensures the income increases with inflation so that eventually when a claim is made the income replacement benefit is in place in the event of your death.

This type of plan takes all the uncertainty out of life insurance and as long as it is an income you are looking to protect or an amount of money per annum and not a capital sum such as a mortgage or loan etc then a family income plan is going to be the most suitable product almost every time.

You have to keep in mind that many folk including your beneficiaries are without the inclination, aspiration or ability to make an income by investing money, so why force them to be. A much better idea would be to ensure your family has a family income plan which will make their lives easier by providing them a set income with a year on year pay increase.

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