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Well, I have to say I think insurance is a bad idea for everybody except couples with small children. So let me leave that alone.

Let me compare your pension with 100% survivorship to your pension with 50% survivorship. Let's simplify and say the 100% survivorship option gives you 0.9 of the full benefit.

If you live N years and get x dollars per year while alive, then M years after your death under the 50% survivorship option the total collected is Nx + Mx/2. With the other option it's 0.9(M + N)x. These become equal when 0.1N = 0.4M, or M = N/4.

To finish the calculation you have to decide when each of you and your wife are going to die. If you are each now 62, you will live to 79.5 with 50% probability and your wife to 83. This argues slightly in favor of the 100% survivorship option. However, I've neglected investment and so on. Personally, if I were married, I'd take the larger sum up front.

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