Business Protection, Keyman Insurance
Keyman Insurance in Dubai for SME - Financial Planning in Dubai
Who is a Keyman?
A keyman is a person who is responsible for the revenue, profits, growth, and...
Family Income Benefit, Zurich Futura, life insurnace
Zurich Futura Family Income Benefit(FIB)
Futura is a flexible, whole of life insurance policy. It is designed to pay a cash lump sum on death. You can also choose to add several optional riders to your policy.
Family Income Benefit(FIB) is one such rider, and it can be beneficial for people looking to ensure that their loved ones have a regular and dependable income in addition to the lump sum life cover.
Let me explain this with an example;
Ramesh and Priya are a young couple, 30 and 29 years respectively, their son Rohit is five years old.
Ramesh is looking to buy Life Insurance, and he reached out to me to help him decide. After going through his protection needs and budget, I recommend him a Futura with the following benefits;
|
Life Cover
|
$450,000
|
|
Critical Illness Cover
|
$ 300,000
|
|
Hospitalization Benefit
|
$ 1000 per week
|
|
Family Income Benefit for 20 Years
|
$ 1000 Per month
|
|
Calculated Premium for 15 years
|
$ 335 Per month
|
Ramesh wanted to understand how family income benefit worked and why he should include this rider?
My answers to his questions were as follows;
- The Family Income Benefit(FIB) provides a regular income for the insured's family in the event of the death, over and above the life cover.
- While the life cover may be used for needs like paying off a mortgage, buying a property etc., and the family income benefit will provide regular and dependable cash flow, till Rohit is 25 years old.
- In the unfortunate event of Ramesh's death, Priya and Rohit may have to go back to India. In such a case they will have a monthly income of $ 1,000 or INR 75,000, which will comfortably support their living and schooling expenses in India in addition to the Lump sum of $450,000
- Having a family income benefit mitigates the risk of running out of money until Rohit can be independent.
- By not including FIB, Ramesh would only save $9, so it is a very affordable benefit to include.
- Typically, it costs much less than a proportionate increase in life cover. In this example, the proportionate increase was $200K
- This option without Family income benefit will cost Ramesh $ 414 per month for 15 years, increasing his premium by $ 79.
The numbers made sense to Ramesh, and he availed his Futura, with the family income benefit.
Ramesh also considered another option, where the life cover was at $ 450,000, along with $ 300,000 Critical Illness Cover and $1,000 hospitalization cover to understand what would the impact of the family income benefit on the monthly premium; and it worked out to be $ 326, only $9 less than the option with family income benefit.
The numbers made sense to Ramesh and he availed his Futura, with the family income benefit.
Technical Facts
Minimum Age at Entry: 17 Years
Maximum Age at Entry: 74 Years
Minimum benefit Term: 10 Years
Maximum Benefit Term: 40 years
Income options: Monthly, Quarterly, Half-yearly or Annual
Income Period: As decided at the outset. In this example - 20 years. So if Ramesh died after ten years, Priya and Rohit would receive the income for the balance ten years.
For Joint life policies, family Income benefit can be availed on one life or both lives
To help you select the right Insurance plan with the most beneficial riders, call me on +97150-2285405 or Arrange a Free Consultation to have a detailed discussion.
