What is the Survivor Benefit Plan?

The Survivor Benefit Plan is a Department of Defense-sponsored and subsidized program that provides up to 55% of a retired service member’s pay to a designated beneficiary upon the retiree’s death. SBP will provide a continuing lifetime annuity to the former member’s spouse or dependent children. Coverage is also available for a former spouse or, if the retiree has no spouse or children, for an “insurable interest” (such as a business partner or parent). SBP can be an important part of a complete estate plan and provide a lifetime of income to a surviving spouse.

SBP is different from insurance.

SBP is different from commercial life insurance as it pays a monthly benefit for the life of the annuitant. The payment amount is inflation-protected and increases by the same percentage as military retiree and Social Security cost of living adjustments. Life insurance policies typically pay a one-time death benefit to a beneficiary that can help meet immediate needs but may not be sufficient to replace a lifetime of income. Even wisely invested life insurance proceeds are subject to market ups and downs and may not be able to provide a lifetime of protection.

What does SBP cost?

SBP premiums are 6.5% of the retiree’s retirement amount. Premiums are deducted from the retiree’s pay before taxes are computed, reducing the effective cost of premiums. If the retiree’s retirement amount is $4,000 per month, the premium will be $260 per month, and the taxable income will be $3,740. The full cost of SBP premiums are subsidized by the federal government, reducing the cost of premiums compared to a commercial insurance policy.

Is SBP for you?

SBP can be an important part of your complete estate plan. SBP is an excellent way to provide a lifetime of inflation-protected income to your survivor for their lifetime. Unlike commercial insurance, there is no physical requirement to participate. If you are married and decline SBP at retirement, you will not be eligible to cover that spouse or a new spouse later should this marriage end in death or divorce and you later remarry. The retiree’s spouse must agree in writing before SBP can be declined. To be eligible to provide SBP coverage for a later acquired spouse, you must elect coverage for your spouse at retirement.

With few exceptions, you may not stop your participation once started. There is a one-year window between your 2^nd and 3^rd anniversary of starting to receive your retired pay. Coverage lost through death or divorce may be restarted.

Once a retiree reaches the age of 70 and has paid premiums for 30 years the SBP is considered paid up and coverage continues without premium.  

SBP participation is an important decision that the retiring member and spouse must jointly make. Learn more about the Survivor Benefit Program.

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