How much family income benefit do I need?
6 October 2026
The right family income benefit figure is not your salary. It is the monthly gap your family would face, for as many years as they would face it.
New to the product? Our family income benefit guide covers what it is and how it pays out. This article is about the two numbers you have to choose: the monthly figure and the term.
Work out family income benefit from your outgoings
The common shortcut is to insure your take-home pay. It is easy, and it is usually wrong in one direction or the other.
Start instead with what the household spends in a normal month. Bank statements for the last three months are the quickest honest source.
Include the regular costs: mortgage or rent, council tax, utilities, food, transport, childcare, clubs, phones, insurance.
Leave out costs that would stop on your death, such as your own commute or your own pension contributions.
What to take off
The mortgage payment, if separate cover would clear it. If you already have mortgage protection, counting the payment again means paying twice for the same cost.
Your partner’s take-home pay, if they would carry on working. Be realistic about whether they would keep the same hours.
Other regular income that would continue, such as rental income or a pension already in payment.
Bereavement Support Payment is time-limited, paid monthly for 18 months, and not everyone qualifies. Check the current rules on GOV.UK rather than relying on it for the long term.
What to add on
Costs that would rise. The most common is childcare, if the surviving parent needs to work more hours or can no longer share the school run.
Help you get for free today. If one of you does most of the cooking, cleaning or care, someone may need to be paid to cover part of it.
A small buffer. Monthly spending is rarely the same twelve months in a row.
This is also why a policy on the lower earner can matter. Their earnings may be smaller, but the cost of replacing what they do can be large.
How long family income benefit should last
The term decides how long the income can run. Payments stop at the end of the original term, not a set number of years after a claim.
Most families set it to run until the youngest child is expected to be independent. Count to that age from today, and do not round down.
A longer term costs more each month, but a claim late in a short term pays for very few months.
If the term is long, think about index-linking. A figure that is right today buys less as prices rise.
A worked example
An illustration, not a quote or a recommendation.
A household spends £3,200 a month. £1,100 of that is the mortgage, which separate decreasing term cover would clear. That leaves £2,100.
Extra childcare would add around £400 a month. That brings the need to £2,500.
The surviving partner takes home £1,400 a month and would keep working. The gap is £1,100 a month.
The youngest child is 3. Running cover to age 21 gives an 18 year term.
So the starting point is around £1,100 a month over 18 years, with index-linking considered. Run the same sum the other way round for the second partner.
Frequently asked questions
Should family income benefit match my full salary?
Not usually. It should cover the gap between what the household would spend each month and the income that would carry on. That is often less than your take-home pay, especially if the mortgage is covered by a separate policy.
How long should the term be?
Most families run it until the youngest child is expected to be financially independent. Count the years to that point rather than picking a round number.
Do I include the mortgage payment?
Only if nothing else would clear it. If you already have mortgage life cover, take the mortgage payment out of the monthly figure, or you will be paying to cover the same cost twice.
Does death in service count?
It is a lump sum, not an income, and it usually ends when you leave that job. It can reduce how much you need, but it is risky to build the whole plan around it.
Should I index-link the monthly figure?
Over a long term it is worth considering. A figure that is right today buys less in 15 years. Index-linking costs more but keeps the income closer to what it was meant to cover.
Do we need a policy on each of us?
Often, yes. Losing the parent who does most of the childcare can add costs even if their earnings are lower. Run the sum for each of you separately.
Related reading
- Family income benefit, plain English guide
- How much life insurance do you actually need?
- Should life insurance be in trust?
Want the sum checked against your own numbers?
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