A retirement policy is a contract that an individual takes out with an insurance company that sells either retirement annuities or pension funds. The insured will pay the insurance company a monthly premium until the policy matures or the insured dies. If the insured outlives the policy, the retirement policy will pay the beneficiary a life benefit. Payment may be a single lump sum or a monthly benefit. Proceeds from retirement policies are not taxable. Finding a retirement policy to suit your individual needs is not always the easiest thing. Many employers have agreements with retirement insurance companies and offer reduced pension fund rates to their employees as part of their employment contract. Although this may be a cheap and effective way of implementing a pension plan, it is advisable to read the policy before you sign the contract. When you change employment, it may be advisable to take your retirement policy with you, rather than emptying it as your saving for retirement will have to start afresh.