Pension Maximization
Definition of "Pension maximization"
Plan under which life insurance is substituted for retirement income. Under the plan, a married individual selects a single life annuity payout from the pension plan, which will generate the maximum monthly income benefit while that individual is alive, with nothing being paid to the surviving spouse after the death of that individual. The higher income generated from the single life annuity, compared with that from a joint life and survivor ship annuity, is used to buy a life insurance policy on the married individual's life. If this individual dies first, the proceeds of the policy will be used to purchase an annuity for the lifetime of the spouse. Should the spouse die first, the married individual still has the higher income benefit from the single life annuity.
Popular Insurance Terms
Form of excess of loss reinsurance under which each year's reinsurance premium is determined by the amount of the cedent's excess losses for a given period of time, usually three or five ...
Type of mortality table that is based on combined statistics from both the ultimate mortality table and the aggregate mortality table. It shows total statistics for the probability of ...
Ownership of property by two or more persons who do not have rights of survivor ship. The share of a deceased tenant passes to that person's heirs and not to the other tenants. Because ...
Time period, for a life insurance policy, in which losses occur. This period must be determined to project the frequency and severity of future loss experience. ...
Method of underwriting insurance in which the insurance company utilizes regular mortality tables without additions for abnormalities. ...
Insurance applicant's life and health record, financial standing, driving record, general character, vocation, and habits. These factors are evaluated by a home office underwriter in ...
Automatic nonproportional reinsurance treaty or automatic proportional reinsurance treaty that provides coverage for losses upon which claims are made while the treaty is in force, without ...
Balance sheet and profit and loss statement of an insurance company. This statement is used by State Insurance Commissioners to regulate an insurance company according to reserve ...
Maximum age of an applicant or insured beyond which an insurance company will not initially underwrite a risk or continue to insure it. For example, under some forms of renewable term life ...
Have a question or comment?
We're here to help.