Lesson 1
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Pension Options

Right before you retire, you will have a tough choice to make - which pension option?

A. Life Option

    Without a supplemental life insurance policy, you may be tempted to elect the Life Option. This option pays the highest monthly pension benefit. The downside is that payments stop when you die. It doesn’t matter how long you worked or how much you paid in over the years. Do you want your surviving spouse to receive a benefit?

B. Survivor Option

    If you have a spouse, you will probably consider choosing a Survivor Option instead. Some plans offer more than one such option, but the end result is the same: Your pension retirement income is reduced to pay for the option of continuing pension payments to your spouse after your death. If your spouse predeceases you, the survivor benefit goes is lost, and income sacrificed to purchase this benefit cannot be recovered.

C. Life Option with a Life Insurance (Pension Maximization)

    A supplemental life insurance policy helps overcome problems inherent in both options discussed above. Properly funded, it allows you to elect the Life Option under your pension and enjoy the maximum monthly benefit. If you die, proceeds from the life insurance policy canl provide for your spouse and dependents. You may even be able to use your on policy cash surrender values to help supplement your retirement income.

    To participate, you have to be willing to start setting some money aside now for later. It requires discipline, but the plan includes several features that will it worth while.

Next:  Lesson 2

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