The Monthly Benefit Rider K a n s a s C i t y L i f e I n s u r a n c e C o m pa n y
Protecting your loved ones month by month
Different Needs, One Innovative Rider People purchase life insurance for a variety of reasons, but primarily for financial protection. Some may purchase enough insurance to cover liabilities such as a mortgage, car payments, or other miscellaneous debts. But what about replacement of a person’s income? Life insurance, which is traditionally paid out in a lump sum, is usually considered for the purpose of income replacement. However, there is another option—the Monthly Benefit Rider.
The Monthly Benefit Rider The Monthly Benefit Rider (MBR) is a rider that can be attached to various universal life policies issued by Kansas City Life Insurance Company. It can help provide beneficiaries with a guaranteed monthly income at the insured's death. With the Monthly Benefit Rider, you have the option to choose the length of the benefit period that best suits your needs. Benefit periods are available from 10 years to age 75. The insured also has the option to include multiple MBRs, with different beneficiaries, different amounts, and different benefit periods on a single policy. To better understand the Monthly Benefit Rider, consider the following examples.
Providing Protection for a Young Family Frank, age 39, purchases a Kansas City Life policy with an MBR. He wants to ensure his wife and young children will be able to maintain their lifestyle if he should die. If Frank passes away while the MBR is in effect, his policy not only provides a lump sum payout for his family’s immediate needs, but his widow also receives money every month to help replace Frank’s income. These monthly checks allow his widow to maintain a budget without dipping into savings. And to help protect against inflation, the automatic increasing benefit feature automatically increases the monthly benefit by 3 percent on each policy anniversary during Frank’s lifetime and while the MBR is in force.
Continuing a College Education Judy, a single mother, was age 55 when she talked to her Kansas City Life agent and decided to purchase a universal life policy with a Monthly Benefit Rider. Judy’s daughter, Kim, will be able to use the monthly benefit from the MBR to continue her education if her mother should die. The beneficiary on the MBR can be different from the beneficiary on the base policy, which can help when there are college-aged children or children from a previous marriage.
Protecting an Investment
Securing the Future
Ron, age 28, and Sue, age 25, are new homeowners. They intend to use both salaries to make the monthly mortgage payment. They purchased life insurance to help pay off the mortgage if either of them dies.
John, age 46, is a business executive. He works hard to provide his wife, Pam, and his three children a comfortable lifestyle. He purchased two MBRs on his universal life policy to ensure his family has adequate protection.
They also decided to purchase an MBR that pays a monthly income equal to their mortgage payment. If Ron or Sue should die, the lump-sum payment from the life insurance policy covers any immediate cash needs while the monthly benefit can be used to pay the mortgage payments.
If John were to die, the first MBR provides Pam with enough monthly income to remain at home until their youngest child graduates from college; while the second Monthly Benefit Rider provides Pam additional income when she is close to her retirement years, after the children are grown. This MBR also protects Pam during the Social Security blackout period (a span of time after the youngest child reaches age 16 and before Pam reaches age 60), when she may not be eligible to receive Social Security benefits.
Using the monthly benefit to pay the mortgage allows continued income tax deductions on the mortgage interest. Because the house represents their biggest investment and largest tax deduction, the MBR helps protect both. The minimum monthly benefit amount is $500, and the maximum amount is 2 percent of the base policy is specified amount. Based on Ron and Sue’s mortgage payment, they selected a $100,000 death benefit on their universal life policy, so they can choose a monthly benefit amount between $500 and $2,000.
The MBRs can be for different amounts and different benefit periods, giving you the flexibility to tailor your policy to your individual needs.
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A Company You Can Count On
A promise of financial security is only as good as the company that makes it. When Kansas City Life makes a promise, we stand behind it. Since 1895 we have assisted policyholders through world wars, the Great Depression, and various periods of recession and inflation. Kansas City Life’s reputation is built on integrity, sound investment strategies, and honest business practices. To us, integrity is not an outdated notion in today’s fast-paced world. It is the guiding force behind every decision we make. Every product we sell is backed by more than a century of quality service and financial security.
Note: The coverage described herein is for the Monthly Benefit Rider available on universal life insurance policies underwritten by Kansas City Life Insurance Company (Home Office: Kansas City, MO). Rider Form R201; rider and form number may differ; coverage is not available on all jurisdictions.
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