Life Income Policy

Life Income Policy

An annuity in which a designated beneficiary receives payments for a certain number of years upon the death of the insured. For example, a husband may purchase a life income policy in order to provide for his wife (the beneficiary) upon his death. The payments begin upon the death of the insured and terminate a stated number of years later. If the beneficiary does not survive the full number of years, a contingent beneficiary receives payments instead. As with all annuities, the insured must purchase it before payments are made, either by a lump sum or periodic payments made through one's working life.
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