Family Income Benefit
This a great way to protect your income and your family to provide them with an income each month if you die.
Family Income Benefit is the same as life insurance and critical illness. The major difference is that the cover pays out a ‘monthly’ Tax-Free income rather than a single lump sum payment.
This type of policy is a great way for young families to protect themselves and generally works out considerably cheaper than the equivalent cover. It also helps to avoid some of the issues that come with a lump sum payment such as complex investment decisions, investment advice and tax.
Cover is only for as long as the policy runs. Once the term ends, the cover and any income payments cease.
For example, if you have a 20-year policy and die five years into this, then the policy will pay out a regular income for the remaining 15 years. If you die 16 years into the policy, it will pay out for the remaining 4 years of the term.
With FIB, the total amount paid out by the policy depends on when you die. If you die in the early years of the policy, the total pay-out will be more than if you die nearer the end of the term of the policy.