What is Family income benefit?

Family income benefit (FIB) or a family income plan is probably one of the most innovative plans in the life insurance market available for family protection.

This type of plan is one of those insurances that does exactly what it says on the tin.

Most life insurance beyond that required to repay mortgages are taken out to for family protection. This means that people take out the insurance to protect their family in the event of their death. They want to ensure that there loved ones will continue to enjoy the same standard of living or close to it in the event of they are no longer around. As your standard of living is directly related to the income that you bring into the household then shouldn't it make sense that any insurance is in some way connected or based upon that income.

That is what family income plans do. You arrange a family income plan on the amount of income you want it to pay out in the event the life assured dies. That income obviously should be as close to the income derived during the life assureds life to ensure that the standard of living is unaffected.

So so you have an income of £24,000 per annum and you wanted your family to maintain their standard of living you would be advised to arrange you FIB plan to pay out a benefit in the region of £2,000 per month. In the event you died during the term of the plan, your family would receive that income till the end of the plan term. IN addition you can elect to have that income indexed. This would mean that you state £2,000 per month now but as the years roll by, whether you make a claim or not, that provision will keep rising with inflation year in year out ensuring that the income they needed in the event of your death is not eroded by inflation itself.

The alternative to family income plans explain exactly why they were invented in the first place.

Without them you would only have a normally lump sum insurance policy to choose from. With that you need to know exactly or even roughly how much of a lump sum you actually need.

To do this you would have to find out what you needed per month in the event of death.

Then you would have to work out how much of a lump sum would be needed in order to produce that amount of income on a monthly basis and you would have to factor in the cost of inflation on that income amount which would obviously mean that the amount of lump sum would have to be larger.

In addition to this to calculate the lump sum you would need to make some sort of prediction as to what rates of  return you would make by investing the money to derive a suitable income. If you did not want to invest the lump sum then you would need more of it in the first place, because invested money makes more money than non invested money, which would in turn push up any premiums for the resulting lump sum life insurance. So once you had accepted that investing the lump sum would be the best way of reducing the initial cost you would then realise that all this would be based on a very inexact science ie your lump sum is just a load of guesses and predictions away from being either sufficient or insufficient and the only time you would know which one it actually was would be long after you had gone when it is far too late.

So family income plans take all this hassle worry guess work and predictions out of the pot and just make it simple ;

How much money do you want a month?

Do you want it protected in the event of inflation?

How long do you want it for?

How easy is that?????

Why not just click the free online quote button above and select family income benefit from the product type drop down box in the quotation system and get a free real-time no obligation quote for FIB plan now.

Or for more information or to seek advice on this or any other life insurance product please click on the contact us tab to the upper left of this page, complete the form and one of our specialist advisors will assist you further.