For my postretirement benefit I chose life insurance. The similarities
when accounting for life insurance and pension is that, they both
have obligations to to another party, such as the member or
policyholder. The differences would be that in the life insurance plan,
no one pays into it but yourself. That money is then produced after
death, to the immediate family listed on the plan. A pension is paid
into by the employee and the employer, and there are tax reliefs on
contributions. Life insurance also ends when you leave the job that
provided it. The pension is probably the better choice depending on
the job, if it is less dangerous there wouldn't necessarily be a need
for life insurance, so the pension option would make a better benefit
in the long run. This makes the most sense because with a pension,
you're being price matched on contributions and although it is taxed,
it is for retirement. A life insurance plan only comes into effect when
you pass away.
