How do family income policies function?

Family income policies are designed specifically to provide financial support to a family after the death of the insured. They operate by offering income replacement through periodic payments, which helps ensure that the family's living expenses are covered over a specific period of time following the loss of a breadwinner. This structure is particularly beneficial for families that rely on the deceased’s income for everyday expenses, as it provides a steady stream of income rather than a one-time payment, allowing them to maintain a standard of living during a difficult time.

In contrast, options that suggest a lump sum payment would not fulfill the ongoing needs of a family adjusting to the loss of income. Similarly, policies that cover only funeral expenses do not address the broader financial needs of the family. Moreover, saying there are no benefits for beneficiaries contradicts the fundamental purpose of a life insurance policy, which aims to provide financial security for the insured’s loved ones. Thus, the periodic payment feature of family income policies is what makes them particularly valuable in supporting families in their time of need.