Family Income Benefit Assurance
Family income benefit pays a monthly income if you were to die within the term. You choose the
amount of income you want at the start of the plan. If a claim is successful, the monthly income
will continue at the level specified until the end of the policy's term. These payments can
either be index linked or level.
Family Income Benefit insurance is primarily used to ensure that a family's income is maintained
at an acceptable level if the main income provider were to die. It usually has a term to when
your dependents are no longer financially independent on your income...when they leave school or
university.
Additional Factors
Couples can apply for either separate individual policies or a joint policy which would usually
pay out on the 1st death (although it is possible to do this on the 2nd death when required for
tax planning reasons).
Writing Policies in trust
If you die the life insurance payout form part of your estate which could mean it is hit with
Inheritance Tax. In many cases it's possible to avoid this by writing the policy in trust,
if this is done at the time the policy is taken out.
Writing your plan in trust means it will go directly to your dependents, so it doesn't go
through probate, avoiding unnecessary solicitor's cost and speeding up the payout.
Joint Life Policies
Joint policies are only suitable if you need the same amount of insurance for the same term
for both partners e.g. a joint mortgage.
Critical Illness
Critical illness policies pay out a lump sum if you get a specific illness as defined by the
terms of the policy.
The payout can enable you to arrange your families' future finances while you still are able.
It is often simply a case of adding critical illness to any of the above policies.
Reviewing Existing Cover
Your circumstances are likely to change in the future; furthermore, they are likely to be
different now than they were in the past. Lifestyle changes such as marriage, having
children, taking out a mortgage or a promotion at work are examples and are likely to affect
your need for cover.
Replacing Existing Cover
Your circumstances are likely to change in the future; furthermore, they are likely to be
different now than they were in the past. Lifestyle changes such as marriage, having
children, taking out a mortgage or a promotion at work are examples and are likely to affect
your need for cover.
If you've an existing policy you bought in the past, there may be significant savings in
replacing it. The cost of life insurance has decreased dramatically in recent years as our
life expectancy has increased. That, coupled with the savings the product providers have
been able to pass on due to their online capabilities, makes reviewing your existing polices
a worthwhile exercise.
However, if you've experienced health problems in the past it may not be beneficial to
replace your existing policies. In some instances, you may find that the cost of new cover
is significantly higher or worse, declined. It is important that you don't cancel existing
arrangements before getting a decision on any new applications.
Another factor affecting the cost of new cover was the Gender Directive, which came into
force in December 2012; it increased the cost of insurance for all females and most males.
