Ron Bliss: Life insurance can be better than pension reduction for spouses

We ran into a situation this week where one of our clients reduced his pension by 30 percent to allow that pension to be transferred to his wife upon his death.

He worked for a major corporation that allowed the pension-reduction option. He had a choice of retiring at full pension or reducing it by 30 percent to make sure his wife would receive it once he passed. The problem is that once you make the decision, your pension remains at the lower level for life, in most cases.

Shortly after he made the decision, his wife was diagnosed with cancer and died within a year of the diagnosis.

In retrospect, he lamented to us that he would have been better off taking his pension at the full amount and, instead, buying life insurance on himself to protect his wife, should he pass away.

“She was a stay-at-home mother,’’ he explained, “and wasn’t reasonably able to go find a job if something happened to me. I always thought the husband dies first and that is why I did it the way I did.’’

Some corporations allow a fallback option, but his company did not and it cost him 30 percent of his pension for the rest of his life.

He had a $1 million term life insurance policy on himself when working, but lost that when he retired. Many folks coming out of similar situations experience sticker shock when seeing life insurance premiums and opt not to buy life insurance — which gets more expensive with each successive year.

So if you are in a similar quandary between pension reduction and life insurance, come see us at RLM, LLC — where we strive to be your affordable healthcare pros — for advice. The advice is free and you can balance the cost of a life insurance premium against what you would lose by choosing a reduced pension to provide for the spouse. In almost every case, the cost of life insurance is going to be less — way less — than what you would lose by opting for the reduced-pension option.

For a free assessment, come by our office at 2307 N. Carson St. in Carson City or call our office number at 775-883-3414 to set up an appointment with one of our agents.

See us first. It could be one of the best decisions of your life.

We also continue to assist those with Qualifying Life Events (QLEs) get health insurance. Anyone who needs coverage — be it from Medicaid, a job change, a death or a birth in the family, a child turning 26, change in marital status or moving from state to state — has 60 days from the time they lost their coverage to get new coverage. We can help you both on the Federal Marketplace or off the exchange. We do insurance for individuals in both Nevada and California.

If you have a QLE, call us at 775-224-7169, 775-450-6769 or 775-338-3647 or at the above office number.

Ron Bliss is a former long-time sports writer who has been doing health insurance since 2009. He is certified on both Covered California and the Nevada Health Link and can sell products on and off both exchanges. Affordable Healthcare Pros also offers both term and whole life insurance, a variety of dental plans to include dental-vision-hearing plans in both states, as well as a wide variety of Medicare supplements and other health supplemental products to include critical illness, short-term care, disability, plans to cover in-home or nursing home costs, accidents and hospital indemnity policies.


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