It’s likely that you’ll have heard of Life and Critical Illness Insurance. They’re pretty standard insurance policies and, if you have a mortgage, they’re just as important as making sure your car is insured.
By having your life insurance in place, you know you’re covered should you pass away and your family would receive a lump sum, potentially to be used to repay the mortgage. But what about the other stuff? What about the monthly bills that come afterwards?
This is where Family Income Benefit comes in.
Family Income Benefit (FIB) is a type of life insurance policy which is designed to pay out a regular monthly income, rather than a lump sum, in the event of the policy holder’s death or diagnosis of a terminal illness*.
Family Income Benefit policies are often taken out by those with children over a certain period of years, for example until the children have finished university, with the expectation that the monthly benefit will cover the associated costs. After all, children can be expensive!
But you don’t have to be thinking about covering the costs of children to benefit from FIB. If you are the main breadwinner, perhaps you’d consider a Family Income Benefit policy that covered those essential outgoings, like rent & bills? Potentially relieving a little bit of the financial pressure on your loved ones. Or for those of you who are full time carers, the Family Income Benefit monthly payments could be used to ensure continuing care. Even though it’s called Family Income Benefit, it really does have a wider scope than that - think of it as ‘Ongoing Costs’ benefit.
Although it’s not a cheery thing to think about; being prepared for future events, like terminal illness and death, can make things a lot easier for your loved ones. It removes another level of stress and worry from those left behind & gives you peace of mind that you’re doing all that you can do to provide a more stable future for those you love.
It can sometimes feel as though these sorts of conversations are ones for the future, but if you start the conversation at a younger age, you may be likely pay less in your premiums than if you wait until you’re older. Insurers are as risk adverse as the rest of us, they know that, statistically, younger, healthy people are less likely to claim than older people so the premiums can be cheaper.**
As we know, everything from the cost of butter to petrol is on the rise at the moment, with inflation hitting 11% in November 2022, we know that £100 today doesn’t get you as much as it did 6 months ago. With that in mind, with some insurers there is the option for your Family Income Benefit to be linked to inflation, so that you know that the payments made out to your loved ones do, in fact, cover what they need to.
If Family Income Benefit is something that could benefit you and your family, get in touch with our insurance advisers to discuss your options. Simply complete the form below & we’ll be in touch.
*Subject to terms & conditions of policy.
** This statement is a generalisation, all cases are subject to full underwriting and premiums are case specific.