Family Income Policy
A combination policy providing whole life plus decreasing term that pays monthly income if the insured dies within a stated period, commonly protecting young families.
Drill all 803 terms as flip-card flashcards in the Exam Engine →
Practice This Concept
A family income policy provides the beneficiary with a monthly income for the remainder of a stated income period (such as 20 years from the policy's issue date) if the insured dies during that period, PLUS:
The full face amount of the base policy, payable when the income period ends — A family income policy combines a base permanent or term life policy with a family income rider. If the insured dies during the income period, the beneficiary receives monthly income until the period ends, and the base policy's face amount is also payable (often as a lump sum when the income payments cease). This arrangement replaces the insured's earning power during the years when the family needs it most.
National insurance concept
A family income policy is best described as whole life insurance combined with:
A decreasing term rider that provides monthly income to the family during the term period — A family income policy pairs a permanent whole life base with a separate decreasing term rider. If the insured dies during the rider's term, the beneficiary receives a monthly income for the remainder of that term, and the whole life base then pays the full face amount when the income period ends. The rider's decreasing benefit mirrors the shrinking period during which the family needs income replacement, and the level premium for the decreasing coverage makes the product affordable. This structure is a high-frequency exam concept.
National insurance concept
Practice all life insurance questions →