Family Income Benefit

Family income benefit (FIB) is a type of life insurance policy that provides regular income payments to your family if you pass away during the policy term. Unlike traditional life insurance, which pays out a lump sum, family income benefit ensures a steady stream of income, helping to cover ongoing living expenses and maintain your family's standard of living.

Family income benefit is designed to provide financial support to your dependents, such as your spouse, children, or other family members who rely on your income. The policy ensures they receive regular payments, typically monthly or annually, if you die during the policy term. This can make some things easier for your family after you pass, by helping them manage day-to-day expenses, mortgage payments, and other financial obligations without experiencing further significant disruptions to their lives.

A joint family income benefit policy can be beneficial for couples who both contribute to the household income. With a joint policy, the benefit is paid out upon the first death of either policyholder, ensuring that the surviving partner and any dependents receive financial support. This can be a cost-effective way to ensure both incomes are protected and provide peace of mind for both partners.

Here are some key features of family income benefit insurance and what it covers:

• Regular income payments: provides regular income to your beneficiaries if you pass away during the policy term
• Specified term: the payments continue until the end of the policy term, which is chosen when you take out the policy
• Critical illness cover: some policies offer optional critical illness cover, which provides income if you’re diagnosed with a specified critical illness during the term

• Regular payments: family income benefit provides a steady income stream, making it easier for your family to budget and manage ongoing expenses
• Financial security: it ensures your dependents have financial support, helping to cover living costs, mortgage payments, and other obligations
• Customisable term: you can choose the length of the policy term to match your specific needs, such as until your children are financially independent
• Cost-effective: family income benefit is often more affordable than a lump sum life insurance policy, making it an attractive option for many families

• Limited term: payments stop at the end of the policy term, which may leave your family without support if they still have financial needs beyond the coverage of the policy
• No lump sum: unlike traditional life insurance, there is no large payout that can be invested or used for significant expenses
• Policy specifics: coverage details, such as the definition of critical illnesses, can vary between providers, so it’s important to read the policy terms carefully
• Inflation: regular payments may not keep up with inflation unless you choose an index-linked policy, potentially reducing the value of the benefit over time

1. Assess your needs: determine the level of income your family would need and the term length that would be most appropriate
2. Compare policies: research and compare quotes from different insurance providers. Look for policies that match your coverage needs and budget
3. Consult an insurance broker: contact a professional insurance broker, like John Charcol, who can provide expert advice and help you find the best policy for your situation
4. Provide information: be prepared to provide personal information and details about your health and lifestyle, as these factors will influence your quote
5. Review and purchase: carefully review the terms and conditions of the policy before purchasing to ensure it meets your needs. Your insurance advisor will discuss your policy with you in detail before you make any decisions

For personalised advice and assistance in selecting the right family income benefit protection plan, contact John Charcol Mortgage Broker on 0333 363 6507. Our experienced advisors can help you navigate your options and secure the best protection for your family’s future.