The insurance industry is one that is always developing and adapting to try to attract more customers. This means that in most sectors of the industry there are potentially hundreds of different products out there that might be right for you. Most are simply sub-categories of other types of insurance, but they can save you a lot of money if they’re right for you.
One such sub-category of the life insurance market that not a lot of people know about is Family Income Benefit insurance. Due to the unique way that Family Income Benefit insurance pays out it is one of the cheapest forms of life insurance available. FIB pays out as a regular income rather than a lump sum, and this has benefits for both families and the insurer. That the amount of cover is paid in regular instalments rather than as a one off lump sum means that the risk to the insurer decreases over the term chosen, as insurance is calculated on the basis of risk anything that reduces risk will also reduce the cost of the premiums.
In the event of a claim being made, income can be paid monthly, quarterly or annually depending on the requirements of the family and under current legislation all the income from the payout is tax free. If you are looking to insure the main earner in the family over a period of time (up to his or her retirement age, for example) FIB insurance can be ideal.
The one major draw back of FIB insurance is that the sum paid out is not a basic sum divided into a number of payouts, it is a set income that lasts as long as the policy does. Therefore if you claim the first day into the life of the policy you will receive that a set amount, say for example £5,000, per year until the end of the policy, whereas if you claim on the last year of the policy you will only receive £5,000 which may be significantly less than the sum of all the money paid in.
Although Term Life insurance is generally the most popular choice for protecting loved ones, many claimants struggle to generate income from the cash lump sum. This generally leads to money being placed in a Bank or Building Society from which they take a regular amount of interest as income, however, with current economic conditions and the poor interest rate, this solution is not as desirable as once it was, and further the interest is often subject to Income Tax. For that reason FIB Insurance is a cheap and potentially attractive alternative.
Life insurance is a vital commodity, not only for the financial protection it affords but also for the peace of mind it grants. It is still important to get the best deal that you can, and if you are looking for a life insurance policy of any type it might be worth considering Legal and General who are offering particularly good deals at the moment.