Customers unaware life insurance payouts can be staggered, survey suggests

Wed, 31 Jan 2007

Many life insurance policyholders may be unaware of the benefits of leaving their children with regular monthly payments as opposed to a single lump sum when they pass away, it has been suggested.

Following a study of life insurance customers by independent financing website moneysupermarket.com, it has been revealed that 17 per cent of respondents do not know whether they would prefer their relatives to receive regular payments or a one-off figure.

Moreover, 24 per cent said that they would definitely be inclined to give their next of kin a regular supplementary income, which could possibly help them to meet regular outgoings such as mortgage payments and pension contributions.

However, Emma Walker, protection manager at the financing specialist, points out that typically two per cent of life insurance customers opt for family income benefit - a life insurance product that provides monthly payouts.

"Our research suggests millions more people would prefer to have cover which pays a regular monthly income and, for these people, family income benefit could be ideal," she explained.

She continued by suggesting that many life insurance customers may simply be unaware of the option to stagger life insurance payments to relatives.

People with a life insurance policy typically agree to pay regular monthly amounts to their insurance provider in the knowledge that their relatives will receive payouts upon their death.

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