Let’s consider the example of Sarah, a 35 year old bank manager, who in January 2015 decides to take out Life cover for $1 million and FUB option of $1 million.
Later that year in July 2015, Sarah sees her circumstances begin to change. She gets married and exercises the FUB option to buy TPD cover for $250,000. Sarah now has $1 million in Life cover and $250,000 in TPD cover.
Fast forward to January 2016 to the next step in their future, when they buy a house with a mortgage of $300,000. Sarah exercises her FUB option and increases her Life cover to $1.3 miiion. Her insurance policy now consists of Life cover of $1.3 million, TPD cover of $250,000 and a FUB balance of $450,000.
Almost two years later in December 2017, Sarah and her husband welcomed their first child. With their family dynamic changing, Sarah exercises her FUB option of $250,000 to buy a Crisis Recovery benefit. Sarah now has $1.3 million of Life cover, $250,000 of TPD cover, $250,000 of Crisis Recovery cover with a FUB balance of $200,000 still to be utilised in the future.
As Sarah’s circumstances changed, she was able to utilise FUB to tailor her insurance policy to fit within her circumstances at a particular time, giving her peace of mind that she is adequately covered.