Most people are familiar with the idea of life insurance paying a lump sum if the worst happens. But for many families, what they truly need is not a windfall, but regular, reliable income to keep everyday life running. Mortgage payments, school fees, utility bills, and weekly food shops don’t come all at once — they arrive month after month.

This is where Family Income Benefit (FIB) comes in. Instead of delivering a single payout, it provides your dependents with an ongoing, tax-free monthly income for the remainder of the policy term if you die during that period. In 2025, as families grapple with rising costs and tighter budgets, the ability to secure predictable support has never been more valuable.

At Willow Private Finance, we often recommend FIB as a practical and cost-effective way to protect households, particularly those with young children or single primary earners.

How Family Income Benefit Works

Family Income Benefit is structured differently to traditional life insurance. Let’s say you take out a 20-year policy for £3,000 per month. If you die after 5 years, your dependents will receive £3,000 every month for the next 15 years. If you die in year 15, they will receive payments for the remaining 5 years. Unlike a lump sum, which depends on how well your loved ones manage and invest it, FIB ensures steady support that matches the way most families actually live and spend.

This structure makes it particularly suitable for households that want certainty around day-to-day expenses. It can be used to cover essentials like mortgage repayments, or simply to maintain living standards while children grow up.

The Growing Relevance of Family Income Benefit in 2025

Several factors are making FIB increasingly relevant today.

First, cost of living pressures are high. With mortgages, rent, energy, and childcare all at elevated levels, many families cannot afford for their income to stop suddenly. FIB provides a direct replacement, ensuring that bills are covered without disruption.

Second, financial literacy and confidence vary widely. Not every spouse or dependent is comfortable managing a large lump sum, particularly under the emotional strain of losing a loved one. A regular monthly payment reduces the risk of poor financial decisions at a vulnerable time.

Third, affordability is a major driver. Because the insurer’s liability reduces as the policy progresses (the closer you get to the end of the term, the fewer years of income left to pay), FIB is often cheaper than equivalent level-term life insurance. This makes it accessible for families on tighter budgets.

How FIB Fits with Other Protection

Family Income Benefit is rarely a standalone solution. Instead, it often works best as part of a layered approach.

For example, a family may choose a decreasing term life insurance policy to cover the mortgage, combined with FIB to cover day-to-day living expenses. If a serious illness is a concern, critical illness cover can be added to provide additional resilience. For those who also want longer-term security, income protection (as explored in our recent blog on Income Protection in 2025) provides an even broader net.

The key is integration. By aligning different protection products, families can create a strategy that addresses both immediate and ongoing needs.

A Scenario That Brings It to Life

Imagine a family with two young children, a mortgage, and household expenses of £2,500 a month. If the main earner were to pass away, a lump sum might pay off the mortgage, but the family would still face the challenge of meeting everyday bills for years to come.

With Family Income Benefit set at £2,500 per month for 20 years, the surviving spouse would have peace of mind that the household’s regular costs were covered until the children reached adulthood. It’s a model of protection that mirrors the rhythm of real life.

Who Should Consider Family Income Benefit?

While every case is unique, FIB is particularly well-suited to:

• Young families with dependent children.
• Households reliant on a single or primary income.
• Clients seeking affordable cover with practical benefits.
• Those who want reassurance that loved ones will not need to manage or invest a lump sum.

For many families, FIB is not about luxury — it’s about ensuring continuity, stability, and dignity during the most difficult of times.

How Willow Can Help

At Willow Private Finance, we take the time to understand not just your financial position, but also your family dynamics and priorities. We recognise that for many households, the biggest worry is not “what if I die?” but “how would my family cope without my income?”

Our advisers compare policies across the whole market to identify solutions that fit seamlessly with your other financial commitments. Whether you are a first-time buyer, a young parent, or an experienced homeowner looking to strengthen your family’s safety net, we can help you put the right structure in place.

📞 Want Help Protecting What Matters Most?

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We’ll help you secure your family, your wealth, and your future.