Do You Need A Family Income Benefit Rider on Your Life Insurance Policy?

The family income benefit rider of a life insurance policy specifies that you’d like benefits to be paid out in installments over time on a monthly basis, for a set number of months.

How a family income benefit rider works

Life insurance benefits are usually paid out to beneficiaries in a one-time lump sum, though in some cases you may have the option of distributing benefits in installments. Based on the size of the death benefit or the number of months you’d like your beneficiaries to receive payments, you can determine the distribution plan that works best for your family.

Reasons for purchasing a family income benefit rider

If you want to provide a monthly income for your policy’s beneficiaries (usually your family), this rider is an effective way of making those arrangements. If the insured person is the family’s primary source of income, this rider can mimic a steady income for beneficiaries. If there are concerns about the beneficiaries’ ability to successfully manage money, this rider can help achieve those goals indirectly.

Family income benefit rider cost

The addition of a family income benefit rider may results in a slightly higher premium, though some insurance companies may not charge you for it.

Other types of insurance riders

Common types of insurance riders include:

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