Your life insurance policy can be used for more than just death benefits. Life insurance can also be used for pension maximization, which is typically used in conjunction with defined benefit qualified pension plans. Pension maximization is a great way to gain needed death benefit protection, while also helping you be able to get the most out of your defined pension benefits.
When choosing how to receive the monthly benefits of the plan on a typical pension plan, you first must choose between a life only benefit and a joint and survivor benefit. The life only benefit will pay the maximum benefit, but when you pass away, your spouse will no longer receive the benefits. The joint and survivor benefit will pay a reduced benefit and allows your spouse to continue receiving benefits after you die.
By using a pension maximization strategy of your life insurance plan is designed to be a middle ground between the two plans. It will allow you to receive higher pension benefits, while also allowing the benefits to be paid to your spouse after your passing.
There are many advantages to choosing a maximization strategy for your life insurance plan, including an opportunity to pass money to heirs and immediate financial protection and control. However, there are also some disadvantages. Some of the disadvantages including that your spouse may lose medical benefits, or the chance that you may not choosing the right amount of life insurance coverage to provide the financial coverage that your spouse needs.
For more information on how you can use your life insurance to maximize your pension, contact Access First Insurance in Eagle, Idaho. We can also help you find the best life insurance policy that will ensure that you and your spouse are financially secure later in life.