the same as life insurance. By providing a martyr, the family is foregoing an income stream. The cash payment is partial compensation for the money the martyr would otherwise have earned (and handed over to the family) in his lifetime.

His own ego involvement is not neccessarily compromised - he isn't doing it for the money, the money simply releases him from an obligation that would require him to stay alive.

But the point is moot: Islam, like most major faiths, does not condone suicide. Nor the massacre of non-combatants. It is only by the weirdest twisting of the concept of "combatant" and the idea of couragous fighting without respect for death that there is any question of the suicide bomber's eternal torment. The money damns the family. And reduces the man to a mere economic unit, just like slavery does. A family that participates in this does not raise sons, it farms long pig.