Family Income Policy

Insurance policy that provides extra income during the period when children are growing up. This life insurance contract combines ordinary life and decreasing term insurance. The Beneficiary receives income payments to the end of a specific period if the insured dies prior to the end of the period. If still living at the end of the specified period, the policyholder receives the face amount of the policy.

Contract combining whole life and decreasing term insurance. A monthly income is paid to a beneficiary if an insured dies during a specific period. At the end of that period, the full face amount of the policy is also paid to the beneficiary. It is designed to provide income for a household while the children are still young. If an insured dies after the specified period, only the face amount of the policy is paid. For example, the face value of a family income policy is $100,000 and the specified period is 20 years. If the insured dies 10 years into the specified period, the beneficiary receives a monthly income of 1% of the face amount ($1000) for the remaining 10 years. At the end of the 10 years, the beneficiary also receives $100,000. If the insured dies after the 20-year specified period, the beneficiary receives $100,000, which is the face amount. See also Family Income Rider; Family Maintenance Policy.