Are you ever worried about how your beneficiaries will handle the income from your life insurance?
If so, a Family Income Manager can give you a surprising amount of flexibility and control over how – and when – the political benefits will be distributed to your loved ones.
In fact, a rider for a family income can go to great lengths to allow your family to continue to receive a monthly income in the absence of your own salary.
What is a family income driver on a life insurance policy?
With a typical life insurance, the entire death benefit is paid to your beneficiaries after your death.
However, if you prefer a more gradual distribution, you can add an income distributor for the family to spread the payments over as much time as you think is appropriate.
These riders are also quite flexible. You can choose to have a certain percentage of your death distribution distributed after your death, while the rest is distributed in installments over a predetermined time.
How it works
With the help of a family income earner, you can determine the number of months and years you want a monthly payment to be made to your beneficiaries.
The number of months or years that payments will be made is largely determined by your age.
As a 30-year-old with a spouse and young children, you may want a family income rider to make payments over 20 years.
As a 40-year-old with teenagers, you may want the payments to be spread over just 1
The basic concept is to use the family income beneficiary to replace your income for your family.
The family's income beneficiary is paid in addition to the death benefit. For example, if you were to take a 20-year policy and die after seven years, the rider could pay income for 13 years.
The benefit is usually based on a percentage of the death benefit.
For example, an insurance of $ 400,000 with a rider percentage of family income of 1% will pay out $ 4,000 per month for the remainder of the stated term.
At the end of the payout period, beneficiaries can receive the income remaining in the policy
One of the biggest benefits of a family income earner is that it does not lead to any major increase in your monthly premium.
The low (or no) premium adjustment has to do with the fact that while the insurance company holds the death benefit in your insurance, they earn the interest income on these funds.
Perhaps more importantly, the family insurance driver only affects the distribution of your death benefit ds.
It does not involve a significant additional cost for the insurance company, in addition to the administration of monthly payments.
If you think a family income earner can work for you, you should always ask about it during the application
Cost will generally not be a significant factor.
Why You Can Consider Adding a Family Income to Your Insurance
Direct Reimbursement of Your Income
Although the original purpose of life insurance was to cover funeral expenses, today it is used much more often to compensate for lost income.
This largely explains the fact that life insurance policies now usually cost hundreds of thousands and even millions of dollars.
Using a family income driver is the best way to ensure that your life insurance income will be used for the intended purpose, that is, to provide your loved ones with support over time.
You can roughly match the monthly payment with your current income, giving 100% of your income which is reimbursed after your death.
Concern over the use of the death benefit
Not everyone has trusted beneficiaries to manage and distribute their life insurance policies properly.
It may be that you have a spouse, child or other beneficiary who you do not fully trust to manage your income effectively.
You may even fear that he or she will disperse the funds early in the process.
For example, let's say you have a $ 500,000 policy to name your spouse as a beneficiary, with the understanding that the funds will gradually be used to support your young children.
If you are worried that your spouse may disperse the funds for the first two or three years, setting up a family income controller will prevent this from happening.
They only receive the amount stated each month, which ensures family support for as long as you deem necessary.
This can be especially important if you are the main income earner in your household.
It allows you to use the life insurance policy to compensate your income in your absence.
How to Add a Family Income Rider to Your New or Existing Life Insurance Policy
Like all life insurance drivers, the best time to add a family income driver to your insurance is when you first purchase it. This will ensure that your wishes are fully met.
However, even if you do not select a family income driver when purchasing, it may still be possible to add the driver to an existing insurance policy.  After all, it's really just the distribution part of the policy; it has no significant effect on the insurance itself.
If you want to consider buying a life insurance policy and adding important options like family income benefits, it is best to work with experienced insurance brokers.
19659003] We not only know the industry but we also know the insurance companies that provide coverage. We can choose a company that best meets your own preferences and needs and always at the most cost-effective premium level for your insurance.
What is also important is that you become aware of all the options you have, another great advantage that we offer as an insurance broker.
Unlike the many online insurance providers, we offer direct brokerage assistance to help you get the policy and options you want. You may not always know exactly what these options are, and this is where our experience will make a difference.
If you want to customize your life insurance, avoid the temptation to follow the do-it-yourself online providers. We all know the right questions to ask and can handle all the paperwork for you.
You do not have to guess, and you do not have to deal with complicated questions and regulations.
You can also rest easy knowing that you will not pay anything extra than if you were to apply directly to a life insurance company. This is because the life insurance companies pay for our services, at no extra cost to you.
If you want to add a family member income driver – or any other type of haulier – or if you have any significant health conditions or specific life insurance needs, we know the best life insurance companies to apply to.
Let us help you navigate the often complicated world of life insurance.
* While we do our utmost to keep our site up to date, please be aware that "current" information on this site, such as quotation estimates or relevant company information, may only be accurate from the last day of editing. Huntley Wealth & Insurance Services and its representatives do not provide legal or tax advice. Contact your own legal or tax advisor.