I will tell you how I might analyze the situation and you can determine whether that makes sense or not for you and your wife.
Your age 57
Wife age 59
No survivor = 5761/mo. + 0/mo.
50% survivor = 5472/mo. + 2736/mo.
100% survivor = 5210/mo. + 5210/mo.
Wife SS at 62 = $1250/mo.
Life expectancy from this Social Security table
https://www.ssa.gov/oact/STATS/table4c6.html
You current 24.09 years (I assume you are male)
Wife current 25.63 years
Wife will be 83 if you die at 81. Her expectancy then is 8.09 more years
Calculate the present value of each option as an annuity using this calculator with an interest rate of 4% (the COLA feature allows you to ignore the effect of inflation on this calculation)
https://financialmentor.com/calcula...ue of Annuity,This is also called discounting.
The format I use is value until your death at 81 (24.09 yrs) plus value from then to her death at 91 (8.09 yrs later)
No survivor = $1,069,886 +$0 = $1,069,886
50% survivor = $1,016,215 + $228,415 = $1,244,630
100% survivor = $ 967,558 + $434,958 = $1,402,516
From that, I conclude that the 100% survivor benefit (your option 2) has the highest expected present value.
Additionally, assume you die the day after you start taking your pension. If you have the 100% survivor benefit, her life continues along as ever. If you take the 50% survivor benefit, she'll have to get by on 50% of your pension. When I find the cite, I will provide it (I know I've posted it before)**, but the general rule is that household expenses vary by the square root of the number of people in the household. So one person cannot live on 50% as much as two. Rather, she will need about 71% of the income (1/(2^-2)= .707). When social security kicks in at 62, she'll have ~73% of the income (2736+1250)/5472 = .728) But she'll have three really lean years before then (50% income). If you choose no survivor provision, you are condemning her to a lifetime of incredibly lean years (1250/5761 = .22).
Based on the above, the young wife and I each took the 100% survivor provision on our pensions when we retired 3 years ago (at 60 and 58). We have sufficient assets so that the difference in current income is immaterial to us, and it is comforting to know that we have longevity insurance in the form of a survivor benefit.
**EDIT TO ADD SOURCE :
That's the method the Congressional Budget Office uses to normalize household income for comparison purposes; the square root of the number of people in the household.
Source
https://www.cbo.gov/system/files/201...old-Income.pdf Appendix A, p. 27