FAMILY INCOME BENEFIT INSURANCE
WHAT IS FAMILY INCOME BENEFIT INSURANCE?
Family income benefit (or ‘FIB’) is a type of life insurance, however, unlike traditional policies that pay out a lump sum, FIB provides beneficiaries instead with a regular, fixed, tax-free income. This product is best suited to families who rely on at least one income to pay the household bills each month; the product then provides peace of mind.
FIB pays regular income amounts from the date of death, until the end of the policy term, as chosen at the outset by you. Once the term ends, cover and payments stop also.
Family income benefit can be suited to new parents with young children, who want an affordable way to ensure their dependants are adequately provisioned for. A regular income can also help with long term budgeting.
Another advantage of family income benefit compared to traditional life insurance is; it does not require beneficiaries to budget, manage or try to invest a large lump sum. This could involve complicated investment decisions, that incur fees/taxes, at a time when you are grieving.
HOW LONG DO I NEED THE COVER?
Before you purchase family income benefit, you need to establish how much income your dependants would need each year. Ideally, this would cover all living costs, not just now but in the future. Then you need to decide how long you require the cover to last.
Often our clients look to ensure the term lasts until their children may be financially independent.
HOW DOES IT WORK?
FIB premiums will vary depending on your individual circumstances such as your age and health, how much cover you need, how long you want the policy to run for, and which insurer you go to.
You can choose the level of income you want the policy to stay at a fixed amount or to be index linked to inflation, therefore keeping its value over time. You do not need to have a medical to qualify for FIB, but you must answer questions about your health and lifestyle.