Family Maintenance Policy

What Does Family Maintenance Policy Mean?

A family maintenance policy is a type of insurance that provides income to a beneficiary for a specified period following the death of the insured. At the end of this income period, the insurer pays the beneficiary a lump sum equivalent to the policy’s face value.

Buyers shopping for this kind of coverage usually compare quotes from the best life insurance companies to see how a combined income-and-lump-sum payout stacks up against a plain term or whole life policy.

Insuranceopedia Explains Family Maintenance Policy

A family maintenance policy is a financial package that combines whole life and level term insurance policies. The name reflects its purpose: to provide financial support to the family breadwinner, with the spouse or dependents typically designated as beneficiaries. This type of policy is often purchased as a safeguard against the loss of income following the death of the breadwinner.

Picking a face value usually comes down to budget, and looking at the average cost of life insurance at different coverage amounts can give you a sense of what monthly premiums will look like. For households where money is tight, life insurance for low-income families is worth a look before committing to a more expensive combined policy.