Family Income Benefit
Family Income Benefit pays out a regular monthly income rather than a cash lump sum for the rest of the duration of the term of the policy.
You can take FIB to cover death or if the insured contracts of a Critical or Serious Illness. If you make a successful claim for say Cancer or Total and Permanent Disability (providing you are covered for these things as policies do vary), you will receive a monthly income until the end of the term of the policy. If you take the policy out to cover £500 per month over 25 years and you make a successful claim in year 5 then you will receive £500 per month for the 20 years that are left on your policy.
Again if you died in year 5 of the policy then your family would receive the £500 for 20 years.
This is sometimes a cheaper alternative to having a standard life or Critical illness policy in the fact the insurer may pay you less in benefits under the policy so rather than paying out a cash lump sum they will pay you a monthly income for the rest of the term of the policy.
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Family Income Benefit Q&As
There are many insurers who provide Family Income Benefit. Royal London and AIG are to name just two providers. If you want the cheapest and best policy, then please get in touch with us to find out
FIB is an insurance policy which pays a monthly income to the family or spouse should the insured person die. It pays out for a length of time, for example if you have £1000 per month over 25 years and you die in year 5, then the policy will pay out for the last 20 years of the policy.
It works by paying your family a monthly income should you die.
It depends on how much income your family may need to live from month to month. You can have this insurance as well as life insurance. You should have enough life insurance to repay all your mortgage and debts like credit cards and loans. You should now work out how much your family spends on bills like food, utilities council tax etc and insure for that amount per month. You can of course insure a higher amount, so your family have extra per month if you wish.
You can write the policy in trust although it will not benefit in Inheritance Tax avoidance benefits. There are benefits of putting the policy in trust such as it does not then form part of your estate so does not need to go through probate therefore the money can be paid straight away rather than waiting for probate.