Family Income Benefit

Acc72

Hello All,


I have been looking into Life Assurance / Critical Illness cover and would like to hear any comments or experiences with regards to Family Income Benefit.


Is this a good cost effective alternative to Life assurance ?


Does anybody have any experiences ?

kingstreet

It isn't an alternative.

It's life cover with the sum assured paid in instalments, rather than as a lump sum, so it's cheaper as it's effectively decreasing cover. (The number of instalments which will be paid falls as the term of the plan passes).

dunstonh

Is this a good cost effective alternative to Life assurance ?

It is life assurance. It is not an alternative. The UK has around 13 different types of life assurance. Although many are no longer mainstream but niche.

FIB has pros and cons compared to other types but it does fit a specific financial need. If your needs can be matched by an FIB then great. If not, then you should avoid it.

Acc72

dunstonh wrote: »

It is life assurance. It is not an alternative. The UK has around 13 different types of life assurance. Although many are no longer mainstream but niche.

FIB has pros and cons compared to other types but it does fit a specific financial need. If your needs can be matched by an FIB then great. If not, then you should avoid it.

Thanks for your reply.


I am trying to understand the pros and cons compared to other types of cover.

kingstreet

What is the need you are trying to satisfy?

As an example, if your need is a lump sum to repay a capital & interest mortgage, use decreasing term which reduces as the debt falls.

If you want to protect your family and ensure your income is replaced on death and after tax and NI you bring home £2,000 a month, a £24,000 family income benefit for the period of the need (youngest child's 21st? 25th? or to age 68 if you have a non-working spouse?) would cover that.

Using lump sum cover is the usual option, but it would be more expensive as the lump sum would be the same regardless of death taking place a day after you take out the policy, or a day before it ends.

Phil_H_MLIA(dip)_Cert_PFS

The answer above is, in my opinion, good - however do look properly into which companies you consider for the CI, specifically the "small print" relating to key illnesses.