Family Income Benefit, often referred to as “FIB,” offers a distinctive approach to life cover. Instead of providing a lump sum payment upon death, this type of policy ensures a regular monthly benefit is paid to your chosen beneficiary for a specified number of years.
Here’s how it works: Let’s say you choose a policy that pays £1,000 per month. This monthly benefit is provided from the time of your passing until your youngest child reaches the age of 18.
Family Income Benefit is an incredibly cost-effective way to secure your loved ones’ financial well-being after you’re gone. By providing a reliable monthly income, it offers your partner or family a dependable source of funds. This income can be used for various purposes, such as covering essential living expenses like utilities, food, and council tax, or filling the gap left by a lost income until the recipient reaches pension age.
This type of policy is especially popular among parents who, although they may have mortgage life cover in place, recognize that they would be unable to manage the responsibilities of raising their children alone in the event of their partner’s death. While the mortgage may be covered, the remaining monthly commitments associated with running a family home still need to be met.
Furthermore, Family Income Benefit can also serve as a means to provide funds to your appointed guardians while they care for your children. For instance, the funds can contribute to their education, food, and childcare expenses, ensuring that they have the necessary support to provide a stable and nurturing environment.
By considering Family Income Benefit, you can ensure the long-term financial security of your loved ones and provide them with the means to meet their ongoing needs, even in your absence.