Family Protection
What is life insurance and how is it different from family income benefit?
Life insurance is a contract between you and an insurance provider, where the insurer agrees to pay a set amount of money—either as a lump sum or in installments—upon your death. This payout helps support your family, cover debts, and ensure your loved ones are financially secure.
Family Income Benefit (FIB) is a type of life insurance designed to provide your family with a regular, tax-free income in the event of your death, rather than a one-time lump sum. It is ideal for families who rely on a steady income to meet monthly expenses, such as rent, mortgage payments, utilities, and childcare.
We were impressed by the level of professionalism and dedication from you. You helped us put a solid estate plan in place and were incredibly patient in answering all our questions. It’s a huge relief to have everything organised.
Type of life insurance
- Term Life Insurance: Provides coverage for a specific period (e.g., 10, 20, or 30 years). If you die within the term, your beneficiaries receive the payout.
- Whole Life Insurance: Provides lifelong coverage, and includes a savings or investment component in addition to the death benefit.
- Family Income Benefit: Rather than a lump sum, this type of insurance provides regular monthly payments to your family, making it easier for them to maintain their standard of living.
If you have children, it’s crucial to appoint a legal guardian in your will—someone you trust to care for your children should anything happen to you. However, being a guardian comes with financial responsibilities. Life insurance, particularly Family Income Benefit, ensures that the appointed guardian has the financial support necessary to provide for your children without being financially burdened.
Securing Financial Stability for Your Children
Peace of Mind for Guardians When you appoint a guardian for your children, life insurance guarantees they won’t face financial strain while caring for them.
With Family Income Benefit, the guardian receives regular monthly payments, providing them with a stable income to cover housing, education, food, and other necessities.
Continuing Your Child’s Quality of Life Life insurance enables the guardian to maintain the same standard of living for your children, ensuring they can continue their schooling, hobbies, and daily routines with minimal disruption.
- Monthly Payments: Unlike traditional life insurance that pays a lump sum, Family Income Benefit pays a fixed amount of money each month for the remainder of the policy term.
- Term Length: You can choose a term length that aligns with your family’s needs, such as the time until your youngest child becomes financially independent.
- Affordability: Family Income Benefit policies are often more affordable than lump-sum life insurance because the payout is spread out over time, reducing the insurer’s risk.
- Cover Living Expenses: FIB ensures your family can cover day-to-day living costs, which can be more manageable than handling a large lump sum payout.
- Maintain Lifestyle: Your family can continue with the same financial support they had before, making the transition smoother during difficult times.
- Ideal for Young Parents: If you have young children, FIB is a great option because it guarantees regular income to support their upbringing through the crucial growing years.
Comparing Family Income Benefit to Lump-Sum Policies
Family Income Benefit:
• Provides regular monthly payments.
• Ensures consistent financial support over time.
• Often more affordable than lump-sum policies.
Lump-Sum Policies:
• Delivers a single, large payment.
• May be harder for beneficiaries to manage without financial advice.
• Ideal for paying off large debts, like mortgages.
…Richard, at Family Financial, made it sound so easy, and once we thought about what was important to us he handled everything, checked and double checked. We’ve never felt more secure about our families future
Got a specific question, or just want to open dialogue?