The life insurance product that costs less and pays more

Friday, June 4, 2010

Family Income Benefit (FIB) may sound like a benefit provided by the government but in actual fact it is a little-known life insurance product that can actually cost less and end up paying out more than traditional life insurance policies.

For most people life insurance serves just one purpose and 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 policy has run its course.

On average FIB is 35 percent cheaper than a normal life insurance policy and can potentially pay out a lot more. It also avoids the tax and charges that habitually come with investing a lump sum.

It is an intelligent choice in these cash-strapped times and also means that the beneficiary cannot blow the money in one go as is often the case when people are given a lump sum, this is crucial if someone is leaving their payout to ensure their children can be properly cared for.

Matt Morris of LifeSearch commented:

"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."