You might have heard the term “family indemnity plan” and questioned its importance and how it works. However, like other insurance policies, a family indemnity plan (FIP) offers several benefits for the insured and their family.
Othneil Blagrove, Senior Manager, Sales and Marketing at JN Life Insurance, explains that an FIP is an insurance plan that provides a cash benefit to cover funeral costs and final expenses associated with you and up to five (5) eligible members of your family. He outlines five compelling reasons why you should consider getting an FIP:
1. Premiums Are Inexpensive
“One of the main features of a family indemnity plan is the inexpensive cost of the premiums,” Mr Blagrove shared. “These premiums can range from as low as several hundred dollars per month to a few thousand dollars, depending on the coverage needed. This makes it accessible for low-income families as a form of insurance to assist with final expenses for a loved one.”
“For these affordable amounts, you can insure each individual for sums ranging between $400,000 and $1.5 million. These amounts ensure that you can take care of funeral expenses or other costs that may arise due to the passing of a loved one,” he added.
2. Reduces Financial Burden
“Having an FIP reduces the financial burden of securing funds to bury your loved ones and even supports your family after you are gone,” Mr Blagrove stated. “It allows you to put funds aside for final expenses for yourself or a family member, covering up to six people, including you, your spouse, children, and in-laws.
Additionally, some FIPs include a critical illness component that can provide financial support in the event of a critical illness diagnosis. This feature gives you comfort and peace of mind during a difficult time, while reducing the additional stress of losing a loved one.”
3. Provides Support for Families
“One of the benefits of the FIP is that it is designed to support families in the event of an untimely death,” Mr Blagrove noted. Depending on the coverage amount of the policy, you can use the funds to cover funeral expenses and allocate the remaining amount for estate taxes or other costs associated with final rites. You can even use it to reduce or clear debt, giving you greater peace of mind.”
4. Helps Build Generational Wealth
Mr Blagrove highlights that FIPs can also assist families in building generational wealth. “With an FIP, you can use the funds to cover final rites, freeing up other resources to handle day-to-day expenses.
Additionally, if you have other types of insurance, those proceeds can be preserved and passed on to the next generation. This is because the death benefit from the FIP can cover final expenses, allowing other assets to remain intact for beneficiaries,” he explained.
5. FIPs Can Supplement Other Types of Life Insurance
“Another advantage of having an FIP is that it can work alongside other insurance products,” Mr Blagrove revealed. “For example, our JN Life Family Comfort includes a critical illness component that allows for a partial payout in the event of a diagnosis. This feature can supplement your critical illness policy if needed.”
“You can also pair it with term life insurance. This combination serves as an effective tool for supplementing your insurance needs in the event of losing a loved one or the main breadwinner.
Additionally, FIPs can complement your whole life policies, allowing you to use the FIP to cover final rites while other insurance policies take care of mortgages, estate taxes, debt reduction, or investments,” he explained.
