Decreasing term life insurance v Family Income Benefit

edited 30 November -1 at 1:00AM in Insurance & Life Assurance
2 replies 700 views
IJH-1IJH-1 Forumite
2 Posts
edited 30 November -1 at 1:00AM in Insurance & Life Assurance
Dear all,


My first post! Is there a difference between decreasing term life insurance and family income benefit (FIB) other than the fact that FIB pays out annually instead of a lump sum?


It doesn't matter to me whether the payout is annually or a lump sum, and I have decreasing term mortgage protection already in place (in fact we hope to have paid the mortgage off in 5 years).


I am therefore looking for cover just to give my wife an income if I die before retirement age (we have young children so her opportunities for working are limited). Every time I look at decreasing term products they reference mortgages in the description, which I don't need.


I'm about to phone one of the providers suggested by MSE, so do I ask for decreasing term life insurance or FIB, or get a quote for both?


Many thanks!


IJH

Replies

  • dunstonhdunstonh Forumite
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    Is there a difference between decreasing term life insurance and family income benefit (FIB) other than the fact that FIB pays out annually instead of a lump sum?

    Not really. Both are decreasing term assurances to some extent. The income is usually paid monthly.

    However, family income benefit doesnt get the same economies of scale pricing that decreasing term assurance does.
    Every time I look at decreasing term products they reference mortgages in the description, which I don't need.

    That is because the vast majority of decreasing term assurances are used for mortgages. So, reference to them is common sense.
    I'm about to phone one of the providers suggested by MSE, so do I ask for decreasing term life insurance or FIB, or get a quote for both?

    Depends on what best fits your needs Why not level term? If you have a decreasing need which is not a mortgage but could be affected by inflation then going with level term may be more sensible as it would offset some inflation.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • IJH-1IJH-1 Forumite
    2 Posts
    Thank you! I'll phone the provider and try to provide a high level summary of the response for the forum.
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