Illinois Code § 40 ILCS 5/22-304

Source of payment.
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The allowance of money to be paid in accordance with the foregoing
provisions of this Division may be paid:

 
(a) from a fund created and maintained out of the corporate revenues of
such city or village in such manner as the corporate authorities may
direct, or

 
(b) by means of group insurance taken out by such city or village for
the benefit of the families or dependents of policemen and firemen in a
regularly accredited legal reserve life insurance company with premiums to
be paid out of the corporate revenues of the city or village.

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