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Fitting in with a mix of other protection policies

This article is part of
Guide to Family Income Benefit

Any client seeking to protect their family financially should consider FIB as an essential element of their protection planning, says Steve Casey, head of marketing and propositions at AIG Life Ltd.

Mr Casey says FIB compliments other protection arrangements, alongside term assurance, critical illness cover and income protection.

A family may, for example, need decreasing term assurance to provide life insurance against their mortgage and FIB to maintain their regular living costs, he points out.

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Family income benefit can be both a standalone policy or compliment other policies, depending on the client’s circumstances, says Emma Thomson, life office relationship director at Lifesearch.

If the client already has cover to protect the mortgage, Ms Thomson says family income benefit could be taken out separately to provide separate cover dedicated to the family’s needs.

However, she says many insurers who offer this cover can provide discounts if more than one type of protection policy is bought together.

Ms Thomson says: “Good advisers will help clients review their overall circumstances, taking any existing cover into account and will recommend what options are best.”

Alan Lakey, partner in Hertfordshire-based Highclere Financial Services, says it may be appropriate to place a policy in trust or arrange for staggered policies where the insurance reduces to reflect a future change of circumstances.

He says: “Most people have several needs, whether they realise it or not, and FIB plans meet some of these.

“Ideally they would sit alongside other plans such as mortgage protection to ensure that on death all debts are expunged and a replacement income is provided.”

Jennifer Gilchrist, senior product development manager with Bright Grey, says menu plans should be considered as these allow the customer to have a number of different covers under one plan with one direct debit with a mix of lump sum and income cover provided together.

She says menu plans have built-in flexibility to make sure that protection put in place today can be amended to accommodate the needs of tomorrow.

Alternatively, Ms Gilchrist says a simple standalone plan can also be arranged which may be all that is needed for some customers.