Family income benefit, sometimes abbreviated to FIB, is a type of Life Insurance. However, unlike traditional policies that pay out a single lump sum, Family Income Benefit provides beneficiaries instead with a regular income that is free of tax.
Regular income payments will usually run from the date of death until the end of the policy term. No benefit is paid out if a claim has not been made before the policy expires.
Family Income Benefit is generally very cost effective cover, because the risk to the insurer reduces each year and unlike whole of life insurance, the insurer are not guaranteed to pay out on any particular policy.
Another advantage of family income benefit is it does not require beneficiaries to budget, manage or invest a large lump sum. This can involve complicated investment decisions, that incur fees/taxes, at a time when you are grieving.
Before you buy Family Income Benefit, you will need to establish how much income your dependents will require each year should the worst happen to you. You should consider all likely living costs, both now and in the future.
Beyond that, you will need to decide how long you will require the cover to last for, known as the term. Often policyholders ensure the term lasts until their children are likely to financially independent.
Does Family Income Benefit sound like it may work for you? Contact Gareth to find out more.