Family Income Benefit (FIB) may sound like a government benefit but it is a little-known life insurance product that can cost less and pay out more than traditional policies.
For most people life insurance means just one thing, a lump sum that pays out on death. However, FIB policies offer a payout in the form of a tax-free income every year until the end of the policy. On average FIB is 35% cheaper than a normal policy and can potentially pay out more. It also avoids the tax and charges normal with investing a lump sum.
It is an excellent choice in these cash-strapped times and also means that the beneficiary cannot blow the money in one go, crucial if someone is leaving their payout to ensure their children can be properly cared for.
Matt Morris of LifeSearch says, "Few consumers know about this product and they are missing out on a product which ensures dependents are cared for and offers very good value for money too. It can be linked to school fees or the cost of home help for the surviving partner if they have children that need to be cared for. The money continues to pay out until the end of the policy, which is normally when the children reach adulthood. It is a cheap and easy way to protect dependents, and a shame people do not know about it."
Life insurance: News update: 2 June 2010