User:Kenyonphillips/sandbox

Pension Maximization refers to the purchase of Life Insurance to protect the spouse of a retired employee who wishes to receive the maximum amount of pension income without disinheriting a spouse at the retired employee’s death.

Upon retirement, a married employee receiving a monthly pension must choose one of two basic options:


 * 1) A “Spouse Survivorship” option that pays less during the employee's retirement, but provides the surviving spouse with ongoing income at the death of the retired employee.
 * 2) An “Employee Only” option that provides the maximum amount of income during the employee's retirement, but discontinues upon his or her death – leaving the surviving spouse with no benefit whatsoever.

With Pension Maximization, the employee chooses the “Employee Only” pension option – but purchases Life Insurance on his or her life to replace lost income to the spouse at the employee's death. The goals of Pension Maximization are as follows:


 * 1) Increase net retirement income while providing protection for the spouse (assuming that the Life Insurance premium would be less than the pension decrease from electing the “Spouse Survivorship” option).
 * 2) Increase financial flexibility for the surviving spouse.
 * 3) Protect against disinheriting any other beneficiaries upon the death of either the retired employee or the spouse.

Viability of Pension Maximization is contingent upon the employee's ability to qualify for Life Insurance with an acceptable premium.