Lying awake, wondering “What if?” It’s a fear that grips many. What would happen to your family if tragedy struck? How would they get by without your income? Enter Family Income Benefit insurance – a policy purpose-built to soften the blow.
What is Family Income Benefit?
What is this unique coverage? Family Income Benefit (FIB) provides a monthly income stream to beneficiaries upon the policyholder’s passing. Not just a single lump sum. But scheduled payments stretching years into the future. Helping your loved ones tread water as the storm of loss rages.
The brightside of the darkest ‘What if.’ That’s the promise of FIB. But what sets it apart from traditional life insurance? See below:
| Policy Feature | Traditional Life Insurance | Family Income Benefit |
| Payout Structure | One lump sum payment | Regular monthly payments |
| Benefit Period | N/A – Single payout | Fixed term (e.g. 10-20 years) |
| Premium Costs | Often higher | Often lower |
| Payout Amount | Based on coverage amount, typically to clear a mortgage | Based on your family income needs |
Monthly instalments to replace monthly salaries for a predetermined term fashioned around your family’s needs. When the family’s primary income earner is gone and funds are thin, obligations don’t go away. They remain. FIB serves as a financial bridge from the present to the next chapter.
Structured simplicity underscores the benefit of this insurance cover. Seek advice to calculate a monthly benefit fitting your income and obligations. Throughout the fixed benefit period – for example until your youngest child is no longer financially dependent – your beneficiaries receive that payment. Mortgage, food, household bills, all accounted for as they chart their new course. But is this policy for you?
Is Family Income Benefit Right for You?
FIB works for any household reliant on each other’s income. With it, families have breathing room to grieve, then plan. Not scrambling for stopgap solutions. If, however, you’ve substantial savings or your partner works, a lump sum policy could suit better.
Boiled down: FIB provides an income stream to stabilise your loved ones.
Frequently Asked Questions:
Q: How long can the payments last?
A: 10-25 years is typical, per your specified benefit period.
Q: Is Family Income Benefit Cheaper than Life Insurance?
A: Family income benefit is invariably cheaper than life insurance, as the overall size of your payout depends on when in the term of the policy you pass away.
Q: Who receives the money – spouse or kids?
A: Your choice. Payments can be made payable to a spouse, children or split between parties. In the event of both parents passing the proceeds can be written in Trust to the guardians of your children.
Q: What happens to a Family Income Benefit Policy on Divorce
A: It can also be used in divorce settlements to ensure that agreed monthly income support for children and/or the ex-matrimonial partner will continue until an agreed date if the party providing the income were to die while the policy was in force.
For families living off a single income, FIB is incredible reassurance. With it, you give your family a financial safeguard if the unthinkable happens.
If protecting your family from freefall is the goal, explore your FIB options with Mark One Financial Services. One conversation could grant priceless peace of mind. Contact us today!
Note – The information contained within was correct at the time of publication but is subject to change.