Companies Downsize Death Benefits

Norma Tischendorf always looked forward to the good life of retirement with her husband John, but after he stopped working, he was diagnosed with ALS, commonly known as Lou Gehrig's disease.

"With ALS, it's basically a death sentence," Tischendorf said.

As CBS News correspondent Trish Regan reports, retirement benefits are becoming a favorite target of corporations looking to boost their bottom lines.

Norma knew she'd lose her companion, but she believed the general retirement package he had earned would leave her financially secure.

John, who died at age 74 in 2003, also believed Norma would be taken care of after his death. "Absolutely," Norma, 72, said.

Then a letter came from Lucent Technologies, which had taken over the company where her husband had worked for 34 years.

While John was on life support, Lucent had decided to cancel payments to surviving family members. So unless John died within 30 days, Norma would be out close to $100,000.

"It was like saying, well, if you turn off this life support then all this money will come to me as a widow," Norma said. "But if you decide to live, it will no longer be an option."

What Lucent optioned to Norma is a death benefit and for years many corporations offered some form of it to its retirees. But with Wall Street demanding higher profits, cutting a cost like the death benefit has become a quick way to save money.