However, the provider has the right to increase the level of payments over time in accordance with the age of the life assured
, claims experience and prevailing medical costs.
AIf your mother had been the only life assured under the bond then it would automatically be encashed on her death.
In your situation, where you are a life assured as well, there will be no "chargeable event" for income tax purposes.
This is a form of insurance that pays out a regular benefit to the life assured
in the event of injury or illness resulting in loss of earnings.
A WOL policy is designed to provide a cash lump sum when the life assured
Income Protection pays out a replacement income to the life assured
The policy can be set up to pay tax-free regular income, either monthly or quarterly, from the date of death of the life assured
until the end of the chosen term.
A family income policy is a special type of term assurance whereby on the death of the life assured
(which I assume is your husband), the insurance company will make a series of regular annual payments instead of a lump sum payment.
It would not pay out until the death of the second life assured
but this would be suitable for parents wishing to leave a sum of money to their children.
Conversely the benefit under an income protection policy would take the form of regular sums paid to the company if the life assured
was absent for a long period of time.
Income protection policies can provide a weekly or monthly income when the life assured
is unable to work due to long term illness or incapacity.
Premiums paid by the employer are generally treated as a business expense for tax purposes and premiums are not treated as a benefit in kind for the life assured