Family Income Benefit provides a tax-free monthly income to your dependants if you pass away during the policy term.
Rather than a lump sum, the policy pays a regular income for the remaining term, helping support mortgage payments, household costs and long-term family stability.
For many families, the greatest financial risk is not debt, it is the loss of ongoing income. While lump sum life insurance can clear liabilities, it does not always replace the regular earnings that support day-to-day living.
Family Income Benefit is designed specifically to address that gap, providing structured monthly financial support to those who depend on you.
Family Income Benefit (FIB) is a form of life insurance designed to replace income rather than provide a single lump sum.
Instead of paying out one large amount on death, FIB provides a regular, tax-free monthly income to your dependants for the remainder of the policy term if you pass away during that period.
For example, if you arrange £20,000 of annual cover (approximately £1,666 per month) over a 20-year term and a claim occurs in year five, the income would typically continue for the remaining 15 years.
This structure is often used where maintaining day-to-day financial stability is more important than repaying a single liability.
You determine the level of annual income required and the length of time it should be payable, typically aligned with the years your household relies on your earnings.
If a valid claim is made during the policy term, the agreed monthly income is paid for the remaining duration of that term. The intention is to provide predictable financial continuity, helping dependants maintain their standard of living.
Many policies can also include terminal illness benefit, inflation-linked increases to help preserve purchasing power, and the option to add critical illness cover. The exact structure and flexibility will vary between insurers, which is why careful selection is important.
Premiums are influenced by factors including age, medical history, smoking status, occupation, the policy term and the level of income selected. Index-linked benefits and longer policy durations will generally increase the cost.
As with all insurance products, terms, definitions and exclusions apply.
Family Income Benefit is typically appropriate where others rely on your earnings to meet ongoing living costs.
It can be particularly relevant where there are dependent children, shared financial commitments or limited savings available to absorb a prolonged loss of income.
In many cases, FIB is used alongside lump-sum life insurance, with the lump sum covering mortgage debt and Family Income Benefit supporting ongoing household expenditure.
Before recommending cover, we assess your financial commitments, income exposure and existing protection arrangements to ensure the structure reflects genuine need.
As with all insurance policies, terms, conditions and exclusions apply..
As directly authorised advisers, we are not restricted to a limited insurer panel. We assess the available options and recommend cover aligned to your objectives.
Family Income Benefit provides a regular monthly income to your dependants if you pass away during the policy term. It is designed to replace lost household income for the remaining term of the policy.
Income protection, by contrast, pays a monthly benefit to you if you are unable to work due to illness or injury. The payments continue while you are medically unable to work, subject to policy terms.
In simple terms:
Family Income Benefit protects your family if you die.
Income protection protects your income if you cannot work.
They address different financial risks and can complement one another depending on your circumstances.
Typically yes. Writing a policy in trust can help control how benefits are distributed and may keep the payout outside your estate for Inheritance Tax purposes, depending on circumstances.
Family Income Benefit pays a regular, tax-free monthly income to your dependants if you pass away during the policy term.
Rather than paying a single lump sum, the policy provides an ongoing income from the date of claim until the end of the agreed term.
If others depend on your earnings, Family Income Benefit can provide structured income replacement, paying a monthly benefit for the remaining policy term if you pass away.
This helps maintain financial continuity rather than relying solely on a lump sum.
Family Income Benefit is often more cost-effective than equivalent lump-sum life insurance because the potential payout reduces over time as the policy term progresses.
The term is commonly aligned to:
The years until children reach financial independence
The remaining mortgage term
Planned retirement age
