Family Income Benefit (FIB) sounds like a government benefit, but it is a little-known life insurance product which can cost less but pay out more than traditional policies.
Most people consider life insurance to be a lump sum which pays out on death . However, FIB policies offer the beneficiary a payout in the form of a tax free income every year until the end of the policy. FIB is, on average, 35 per cent cheaper than a normal policy and can potentially pay out more. It also avoids the tax and charges which are standard when investing a lump sum.
LifeSearch Senior Policy Adviser, Matt Morris, said: "Few consumers know about this product and they are missing out on a product which ensures dependants are cared for and offers very good value for money too. It is a cheap and simple way to protect dependants."
He added that Family Income Benefit 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 have reached adulthood.




