Protecting Your Family
When it comes to protecting families, Family Income Benefit (FIB) is one of the most effective yet underused solutions.
Unlike traditional life insurance that pays a lump sum, FIB provides a regular monthly income to loved ones if the worst happens—offering financial stability during an emotionally turbulent time.
For parents, the biggest fear isn’t just losing income or covering the mortgage—it’s the thought of their children being left without support, guidance, or the means to live the life they envisioned for them. FIB directly addresses this concern by ensuring that children and dependents are financially protected for a set period, helping them maintain their lifestyle and future opportunities.
If ever you were to pass away, your loss of income into the household could be devastating to your family and their finances.
Many will set up a policy to pay off their mortgage in the event of their death, but this does not necessarily leave enough to service the rest of the family’s outgoings on one income, especially where there might be a household to run with multiple children, childcare fees, education, vehicles to run, food, pets and utilities.
A family income benefit plan can be a relatively inexpensive way of providing your family with an income, rather than a lump sum should you pass away, or if you are diagnosed with a terminal illness.
A straight forward example:
If your net monthly income is £2,000 per month and your mortgage is £800 per month. You have a life insurance policy that will cover the £800 per month commitment, however, in this scenario your household would still be £1,200 worse off every single month. With cost of living increases this will also be exacerbated year on year.
To protect yourself against this issue, you could put in place a family income benefit plan.
This is life insurance that is paid out monthly instead of paying out a lump sum. Having a policy like this in place to protect your partner/family is crucial to helping ensure they can maintain the standard of living you current have.
Based on the above example you could take out a policy that would pay you £1,200 per month. If you have children this cover could be put in place until the youngest child reaches age 23. This is a common approach and based upon when they might finish their education and become financially independent. The level of cover and the number of years you put it in place for is flexible and can be tailored to your individual circumstances.
The monthly level of cover you select can be index linked to help ensure the amount you would receive increases in line with cost of living increases over the years.
Many family income benefit plans give you the option to include critical illness cover, meaning that your policy will pay out your selected level of cover every month if you are diagnosed with a critical illness listed on the policy.
Family Income Benefit gives you peace of mind that should you or your partner pass away, that your family will not suffer any financial hardship, and will be able to maintain their current lifestyle.
Speak to our advisors today and we can give you an idea of costs based on your requirements.
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