What is the Survivor Benefit Plan? (SBP)

Many families use a retired military spouse’s retirement pay as a substantial income supplement. Sadly, it can be a real hardship for a family when the retirement pay stops after the retiree’s death, leaving a spouse or child in a bind. Due to this, the Survivor Benefit Plan was created as a way to alleviate some of the stress put upon a family’s finances after death. These benefits are like an insurance plan and will pays the beneficiary a monthly annuity to compensate for the loss of the deceased retiree’s retirement income. A monthly premium will be deducted from your retired pay for the surviving spouse to receive up to 55% of the member’s/retiree retired pay.

Who can I elect as my beneficiary?

While most know that the spouse is obviously an eligible beneficiary, it is lesser known that there are actually up to six different categories that can be selected as beneficiaries. In terms of eligible beneficiaries, you have your spouse, children, former spouse, and the lesser-used insurable interest. However, there are a few different splits that allow you to reach the six different categories. They each have their own requirements and stipulations so you’ll find a brief breakdown below. Be aware they this is not a complete rundown of what you could see but you should have a solid idea of what is possible.

The categories consist of:

Your Spouse:

This one is pretty straightforward. A spouse is eligible so long as they are married to the retiree when the retiree dies. So long as the spouse does not remarry before they turn 55, the benefits are paid until they die. However, if they do remarry, the payments will be suspended and can only be resumed if the remarriage ends. If you are married at the time of SBP election, you must obtain your spouse’s notarized signature to (1) elect less than full benefits, (2) anyone else as beneficiary or, (3) to not elect SBP benefits.

Your Children:

You may select your child or children as primary beneficiaries of your SBP.

Children are eligible until the age of 18. However, this age cap rises to 22 if the child is a full time college student and remains unmarried. Further, the annuity the child receives continues throughout their eligibility if the retiree dies before the child reaches ineligibility. If there is more than one child, the annuity is divided among all of the children equally. It is important to note that “children” are defined as stepchildren, foster children, and adopted children

Your Spouse and Children:

This is generally just seen as a combination of the two categories above. The same eligibility requirements apply for children and the same limitations to the spouse’s ability to remarry still apply. In the case that the spouse does remarry, the children will become the primary beneficiaries of the annuity. Again, the annuity is divided equally among the children in the chance that they do receive the payment.

Your Former Spouse:

You tend to see this option being selected more through a State Court order arising from dissolution of marriage, though it is possible to voluntarily elect this. There truly aren’t many differences between the eligibility rules for a former spouse as your beneficiary as opposed to a current spouse. Further, if the former spouse dies before you, then the beneficiary status may revert back to the current military spouse.

However, if it is court-ordered to have SBP for a former spouse, then such election must be done by either the member/retiree or the former spouse within one (1) year of the divorce order or the SBP benefits may be forever lost for the former spouse.

Your Former Spouse and Children:

This applies only to the children of the marriage with the former spouse. In essence, you cannot elect your former spouse and children of your current marriage as your beneficiaries. Other than that, this operates very similarly to the scenario above.

A Person’s Insured Interests:

This one is a little less common than the others, but it is certainly an option to those of you who are unmarried or without children, though typically, this is for a relation such as a sibling but can be others. Now first, it may help to discuss what an insurable interest is.

Now, this category is a little more complicated in terms of annuity payments and what comes after the beneficiary is elected. Here, the retiree will first have to choose how much the base amount for the annuity will be. This can range anywhere from $300 to the full monthly retirement allotment. The stipulation here, is that proof of financial expectation is required,

unless the person who holds the insured interest is related to the member closer than a cousin. However, do note that if the military retiree spouse chooses to not elect their current spouse, then the military retiree spouse must get approval from the current spouse to deny coverage. The military spouse is then barred from covering a new child or spouse.

Does this apply for same sex marriages?

The U.S. Supreme Court ruled that sections of the Defense of Marriage Act were unconstitutional and now recognizes same sex marriages. A few months after the Supreme Court ruling, the Department of Defense announced that the Survivor Benefit Plan would extend coverage to same sex spouses of military families. Furthermore, any marriage certificate after June 26, 2013 will be deemed valid under the Survivor Benefit Plan.

Did a loved one die?

If you are reading this because a loved one died, and you have no idea of what to do next, then please contact the Defense Finance and Accounting Services

(DFAS). It is imperative that they are notified of the death of the retiree to avoid some potential headaches as well as to avoid any overpayments that may occur. Furthermore, this will begin the SBP benefits. It should take a few months to receive any payments, but worry not! The payments will be retroactively paid. The most important thing here, as I mentioned before is to alert DFAS timely.