Family Income Benefit
What is family income benefit?
Family Income Benefit (FIB) provides a tax free regular income which is paid out for the remaining term of the policy if you die. FIB can provide a replacement income and may be index-linked to inflation.
How it works
The regular payout from a FIB policy lasts only as long as the policy runs. Once the term ends, cover and any payments cease. So if you take out a 20-year policy and die five years into it, your family will receive regular income for the remaining 15 years. If you were to die 16 years into the policy, it will pay out for the remaining four years.
This is different from other term life insurance policies, which give a lump sum if you die within the term. One of the most common is level term life insurance, where a lump sum is paid on death. This amount is the same whether death comes at the beginning or end of the policy. There are also some life insurance policies that run indefinitely, called whole-of-life policies, so that a guaranteed sum is paid when death occurs.
Why you might want it
Household bills will always need to be paid. A sudden loss of income can make it tough to manage these and other expenses and this is where FIB can help to provide extra support.
If you have a young family, you might want cover to run until your children are grown up, using the income for everyday expenses or specific items such as school or university fees.