Military Survivor Benefit Plan (SBP) Details for Active Duty
The Military Survivor benefits plan is similar to term insurance, with a few significant differences. Unlike term insurance, SBP coverage never terminates due to your age. It also provides an inflation-protected annuity for the life of your spouse or other eligible beneficiary. The Survivor Benefit Plan is more closely related to permanent life insurance which also never terminates due to age and provides an increasing death benefit and cash value account.
| Percentage of Retirement Pay Received by the Survivors of and Active Duty or Retired Service Member: | Provided at no cost while on active duty, but is offset by any Spouse DIC received Active Duty deaths are considered totally disabled, which means that retirement pay is based on 75% of base pay (subject to retirement plan rules for Final Pay, High 3 or REDUX) Participation is voluntary for retirees with payments made via deduction for retirement pay.
| Survivor Benfits Plan (SBP) PaymentCOLA Adjusted Annually | Survivor Benefits Plan (SBP) CostPremiums Paid with Pre-Tax Dollars | Choose a base amount from a minimum of $300.00 up to full retirement pay. SBP Payments are 55% of the base amount elected. A monthly benefit, not a lump sum payment.
| Spouse coverage cost is 6.5% of the base amount elected in dollars per month. Child coverage cost is based on the ages of the retiree and the youngest child and the base amount chosen. All premiums cease upon the death of the retiree.
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Coverage OptionsYou are allowed to make one election from the list below.| Spouse | A Survivor Benefit Plan annuity will only be paid to the spouse and will stop at their death. | Spouse and Child
| Allows for payment to be made first to the spouse and, in their absence, to children (via a guardian). | Child only
| Annuity payments provided to children until age 18, or 22 if enrolled in school, upon which payments cease. | Former Spouse and Former Child
| Choice may be required by a divorce decree. Individuals who are under a court order to cover a former spouse cannot cover a current spouse. | Insurable Interest
| May be used by those with no spouse or children. Payments must be made to a person and the cost is different from the information above. Those interested in this choice need to verify the eligibility rules and review the cost structure. |
SBP annuity and premium costs are indexed to retirement pay. Both increase with COLA increases. All premiums cease upon the death of the retiree. The Survivor Benefits Plan annuity to survivors continues to increase with COLA increases.
Military Survivor Benefit Plan Details
| Spouse concurrence is required if any base amount less than full retired/retainer pay is elected and/or spouse coverage is not elected. Participation decision is revocable between the 2nd and 3rd year of receiving retirement/retainer pay with spouse concurrence. Participation is paid up after completion of 30 years of payment and attaining age 70. A spouse receiving and SBP annuity become ineligible if remarried prior to age 55. Benefits can resume at the death of the new spouse of if the marriage ends in divorce.
| Participants cease paying premiums when: Their children are no longer eligible, which occurs on their 18th birthday (or to age 22 if a student); however, a disabled child is eligible for life. They lose their spouse through death or divorce.
An unmarried, divorced or widow/widower retiree can elect SBP coverage for a new spouse. This coverage becomes effective one year after the marriage. Service members without children at the time of retirement may elect coverage for children within 1 year after their birth or adoption.
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SBP Cost ExampleHere's an example of the cost and SBP payment benefit for a retiring service member with $2,000 in gross monthly retired pay who elects SBP on the entire amount under 3 different scenarios | Spouse | Spouse and Child* | Child Only* | Monthly retired pay covered by SBP | $2,000.00 | $2,000.00 | $2,000.00 | Monthly cost | $130.00 | $130.38 | $5.40 | Retired pay after cost of Survivor Benefits Plan | $1,870.00 | $1,869.62 | $1,994.60 | Spouse's survivor benefit (55% of amount covered) | $1,100.00 | $1,100.00 | $1,100.00 |
* This example is for a 44 year old service member with a 10 year old child.
Potential Survivor BenefitsDeclining Participation in the Military Survivor Benefits PlanYou are required to make your SBP election by your last day on active duty. If you choose not to participate, you will not have another chance to enroll later. Review your life insurance coverage, savings and investments to ensure that your loved ones will have the financial resources they need to take care of themselves if you die. Understanding Your OptionsNavy Mutual Aid Association has been recognized by the Department of Defense as a resource for counseling and information on the Survivor Benefit Plan. If you need help making your decision – or want to compare your options – contact us to get the expert guidance and assistance you need.
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Straight Facts on SBP for Active Duty