Family Income Benefit
Family income benefit (FIB) is a form of life assurance designed to pay a regular income rather than a lump sum.
Leaving a lump sum isn’t always the answer
This cover will pay out if death occurs, and provides an income per year for the term remaining on the policy. For example, for a 20 year term, where the claim occurred after five years, there would be 15 annual payments made in total.
The payments are not normally subject to income tax but may impact some state benefits.
The plan will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Frequently asked questions
- Why choose an income over a lump sum?
If you are the breadwinner and your family are financially dependent upon you, a regular payment might be more suitable for them. It allows them to budget and continue to maintain their lifestyle whereas a lump sum can be easily ‘frittered away’.
- Is this not just income protection?
No. Family income benefit is a form of life assurance and is only payable on death or diagnosis of a terminal illness.
- How long is the income payable for?
The income is payable for the remainder of the term of the policy. For example, if you have a policy in place until age 67 and you die at age 61, the income will be paid out for 6 years.
