Secure family life insurance to protect your loved ones',…
Family income benefit (also known as FIB or family income protection), is an alternative form of life insurance.
You’ll pay a monthly premium for your cover but, unlike traditional forms of life insurance, your loved ones will receive ongoing monthly income payments (rather than a lump sum) upon your passing.
These family income benefit payments will run from the day the claim is accepted until the end of your policy.
Payments are tax-free and can help to replace your income so that your loved ones can continue with their current lifestyle.
Family income benefit is well suited to new parents, or those with young families, who want an affordable way to help provide for their loved ones should the worst happen.
Can be more or less depending on the provider
Family income benefit works similarly to other forms of life insurance, where you’ll choose how much you’d like to be paid out to your loved ones and how long you’d like to be covered for.
The difference is, instead of a lump sum, your loved ones will receive monthly income payments.
Upon your passing, loved ones can make a claim and payments will commence for the remainder of your policy term.
These payments can help enable your loved ones to sustain their current lifestyle when you’re no longer around, without having to make drastic cutbacks.
If you don’t pass away within your policy term, no pay out will be made and your policy will simply expire.
How much family income benefit cover you need will depend on your personal circumstances and what financial commitments you’d like to cover for your loved ones.
Family income benefit is ideal for young families who want to help protect ongoing family living costs.
It can help to replace lost income after your passing and allow your loved ones to continue with their current lifestyle.
Need help with family budgeting? The Money Helper (set up by government) can provide free & impartial advice.
Therefore, when working out how much cover you need, it’s important to consider:
Commonly, payments from family income benefit are used to help cover:
By adding together all your financial commitments, you should find the sum of money your loved ones are likely to need to help cover all essential costs.
You can use our handy family income benefit calculator below to help you do this.
Family income benefit premiums are calculated in the same manner as other forms of life insurance; based on your likelihood of making a claim.
During the application you’ll be required to provide key information, which will allow insurers to assess your level of risk.
This information includes details about yourself as well as details about your policy, including:
When taking out family income benefit, you have the option of guaranteed premiums or reviewable premiums.
Guaranteed premiums will remain the same throughout the lifetime of the policy, meaning the price you pay doesn’t change.
Reviewable premiums can often be cheaper initially, but your insurer has the right to increase them throughout the term of your policy (this can be down to a range of factors such as your age or change in risk).
Family income benefit is available from just £5 a month through Reassured Advice.
However, the price you pay will vary depending on your personal circumstances.
The details listed above will be taken into consideration by insurers in order to calculate your premium.
The table below shows an example of family income benefit quotes.
Quotes are based on a non-smoker, in good health, with a monthly payment of £2,500 (£30,000 per year) over a 20-year term:
|Age||Family income benefit price a month|
As with any form of life insurance, the price you pay for your cover typically increases as you get older.
Taking out cover as soon as possible can help you to lock in the most favourable premium price.
To find the most affordable family income benefit premiums it’s essential to compare quotes.
Why not let Reassured Advice help you do this? Simply get in touch for your free quotes.
No, family income benefit payments are tax-free.
Inheritance tax is charged at 40% on anything that takes an estate (your savings, property, and possessions) over the threshold of £325,000.
With traditional life insurance policies, a lump sum payment can easily take an estate over this amount and make it subject to inheritance tax.
As family income benefit provides monthly payments, rather than a lump sum that gets consolidated to your estate, they won’t be affected by inheritance tax.
Family income benefit payments also won’t be subject to income tax.
Yes, it’s possible to add critical illness cover to a family income benefit policy for an additional cost.
Critical illness cover can allow you to make an early claim on your policy if you’re diagnosed with a life-threatening illness.
In this scenario, you and your loved ones would start receiving payments from the point of your claim being made until your policy expires.
These funds could help to replace any lost income if you’re unable to work, help to maintain family living standards and/or pay for any private medical treatments.
Once a critical illness cover claim has been made, your loved ones won’t be able to make another claim on your policy upon your passing.
FREE terminal illness cover with family income benefit through Reassured Advice
Terminal illness cover comes as standard with all family income benefit policies secured through Reassured Advice.
This additional level of cover will allow you to make an early claim on your life insurance policy if you’re diagnosed with a terminal illness and given less than 12 months to live.
The funds received can help to pay for end-of-life care, allow you to get your financial affairs in order or you can use the proceeds to enjoy time with your loved ones.
Contact a friendly member of the Reassured Advice team for more information.
Family income benefit pays out in monthly income instalments, whereas term life provides a lump sum payment.
Both are an affordable way to protect your loved ones financially - allowing them to keep up with essential daily living costs after your passing.
If you have the budget, it doesn’t always have to be a choice between one or the other - it’s possible to take multiple life insurance policies at the same time.
This could be a term life insurance policy to help protect larger costs, such as your mortgage and funeral costs, alongside a family income benefit policy to help protect your family’s daily living costs.
Conduct a full family income benefit vs term life insurance comparison using Reassured Advice.
While family income benefit and income protection sound similar, they are two different policies.
Family income benefit will provide a monthly income for your loved ones after your passing, whereas income protection will provide monthly payments to cover your income while you’re unable to work.
If it’s within your budget it can be possible to take out both policies simultaneously; an income protection policy to cover your income during working life and family income benefit to allow loved ones to receive a regular income after your passing.
By having both policies in place you can rest assured that you and your loved ones are protected no matter what.
Why not compare both family income benefit and income protection, for free, using Reassured Advice?
You can write a family income benefit policy in trust.
Writing your policy in trust is the process of detaching its value from your estate.
With traditional life insurance, this is often done to avoid/minimise 40% inheritance tax for your loved ones - as It’s easy for the lump sum pay out to take your estate over the £325,000 threshold.
However, in the case of family income benefit, as payments are made monthly they aren’t liable for inheritance tax.
It can still be worth writing your family income benefit policy in trust to benefit from the following:
Reassured Advice offer a free trust writing service with the majority of policies they sell. Simply get in touch to find out more.
Yes, it's possible to take out family income benefit on a joint basis through Reassured Advice.
A joint policy could help you to save money as only one premium is paid between both policyholders.
However, in this instance, monthly payments will only be made after one partner passes away (usually the first).
Once the policy comes to an end, payments will cease, and the surviving partner will no longer be covered.
This means the surviving partner will need to secure a new policy, potentially at an older age, which could result in higher premiums.
Whether family income benefit is right for you will ultimately depend on your personal circumstances.
Everyone takes out life cover for different reasons so, depending on your unique reasons, family income benefit could be a good match.
Below you’ll find the advantages and disadvantages of family income benefit:
|Advantages of family income benefit||Disadvantages of family income benefit|
|Pays out in monthly instalments||Only pays out if you pass away during the term|
|A good option for young families||Possible to outlive your policy term|
|Payments are tax-free||Will only pay out for the remainder of the policy term|
|Can help with long-term family budgeting||Not suitable for clearing large debt, such as a mortgage, or covering expensive funeral costs|
|An affordable policy option with low premiums||You don’t get your money back if you don’t pass away during the term|
|Avoid complicated money management / investment of a large lump sum|
|Terminal illness cover comes as standard|
|Critical illness cover can be added for an additional cost|
|Can be taken out on a joint basis|
|Can be written in trust|
If you’re unsure about whether a life insurance option is right for you, it’s always worth reaching out to an expert.
Reassured Advice can provide you with all the information you need to know about multiple policy options (from family income benefit to life insurance and income protection).
This ensures you find the right policy to meet your needs, at the best available price from our panel of insurers.
Family income benefit can be an extremely cost-effective way of protecting your loved ones.
Comparing quotes can allow you to find the right family income benefit policy to meet your needs at a price that’s within your budget.
Reassured Advice can help you to do this and provide you with quotes from the UK’s best providers free of charge.
A friendly member of the team can also unpick any jargon you don’t understand and answer any questions.
Protect your family from as little as 20p-a-day and get in touch for your free, personalised and no-obligation quotes.
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