Retirement & Wealth
Pension Maximisation
Comparing a higher single-life pension plus life cover against a joint-and-survivor election.
What this cover does
Defined-benefit pensions force a one-time choice: a higher payment for your life only, or a lower one that continues to a spouse. Pension maximisation tests whether taking the higher single-life amount and insuring the spouse separately leaves the household better off.
Typically included
- Side-by-side comparison of election options
- Life cover sized to replace the survivor benefit
- Analysis of the cost difference between elections
- Health and insurability assessment before committing
- Break-even and survivorship modelling
Common add-ons
- Permanent cover so protection does not expire before the pension does
- Joint survivorship policies
- Long-term care riders on the funding policy
Questions
What people ask about pension max
Is this always better than joint and survivor?
No. It depends on the cost difference between elections, your insurability, the premium and tax treatment. If you cannot be underwritten at a sensible rate it does not work at all, which is why insurability is tested first.
What if the policy lapses?
The survivor benefit is gone and the pension election cannot be undone. That is the central risk, and it is the reason this is funded with permanent cover rather than term.
Often taken together
Related cover
Retirement Income Planning
Turning accumulated savings into income that lasts as long as you do.
Read more →Quote Pension Maximisation
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