The Survivor Benefit Plan, or “SBP”, is a Department of Defense annuity plan (similar to a life insurance policy) that provides monthly payments to eligible surviving family members upon a veteran retiree’s death.
When retiring from the military, servicemembers must submit DD Form 2656, “Data for Payment of Retired Personnel”, in order to receive retired pay. Enrollment in the Survivor Benefit Plan is done through DD Form 2656 as well.
- If you do not specify dependents and/or the amount of coverage, you will be automatically enrolled for all eligible dependents at the full coverage level.
- If you wish to decline coverage for your spouse, or to enroll for less than full coverage, your spouse must sign the form as well to indicate that they agree.
- This is the only opportunity to enroll in SBP for existing dependents; if the veteran marries or has children after retirement, they may be added by filing DD Form 2656-6, “Survivor Benefit Plan Election Change Certificate”.
- DD Form 2656-6 is available at http://www.dtic.mil/whs/directives/forms/eforms/dd2656-6.pdf.
Visit http://www.dtic.mil/whs/directives/forms/eforms/dd2656.pdf to download a copy of DD Form 2656.
Once you have enrolled, the monthly premium payments will be deducted from retirement pay, unless you elect otherwise.
SBP Eligible Beneficiaries
Spouses: The veteran’s spouse at the time of death.
- If the veteran marries after retirement, the marriage must last for at least a year before death or result in children for the spouse to be eligible.
- If the spouse remarries before the age of 55, they forfeit their SBP monthly payments until and unless that marriage ends.
- SBP spouse benefits last for life for un-remarried spouses.
Former spouses: The veteran’s former spouse at the time of retirement.
- If the veteran is divorced after retirement, the former spouse who was covered as a spouse can continue to be covered by filing DD Form 2656-1, “Survivor Benefit Plan (SBP) Election Statement for Former Spouse Coverage”.
- DD Form 2656-6 is available at http://www.dtic.mil/whs/directives/forms/eforms/dd2656-1.pdf.
- If the veteran elects to cover a former spouse, a current spouse is ineligible to receive SBP.
- All dependent children living with the retiree are eligible, including
- Recognized natural children
- Adopted children
- Foster children
- Children must be under age 18, unless
- Enrolled in school (coverage continues to age 22)
- Permanently incapacitated by disability that occurred during eligibility (coverage continues for life)
- Married (coverage ends upon marriage)
“Insured Interest” Individuals
If the veteran retiree has no other eligible beneficiaries, they may name an individual with a financial interest in their life.
- Examples include any natural relations, stepparents, business partners, or children who are ineligible for child coverage due to age or self-sufficiency.
- The individual must be a natural person—it cannot be a company, trust, or organization.
- If the veteran retiree marries or has children, they can elect to change coverage to a spouse or children within one year of marriage/birth.
SPB Premiums and Payments
SBP premiums are deducted as a percentage of the chosen base amount, which can be a minimum of $300 and a maximum of the veteran retiree’s entire retired pay amount.
For spouse-only coverage, the premium is 6.5% of the chosen base amount.
If the veteran retiree was on active duty on or before March 1, 1990, the calculation may be slightly different, and is adjusted annually based on the a threshold amount and annual cost-of-living adjustments.
For child-only coverage, the premium will be based on the retiree’s age and the age of the youngest child.
For spouse and child coverage, the premium will be based on the spouse-only premium plus additional costs based on the retiree’s and spouse’s ages and the age of the youngest child.
For insurable interest coverage, the premium is 10 percent of gross retired pay plus an additional 5 percent for every 5 years in age difference, if the beneficiary is younger than the retiree.
- The insurable interest premium cannot exceed 40 percent of retired pay regardless of an age difference exceeding 30 years (10 percent plus 30 percent for 6 increments of 5-year age difference).
In all cases, SBP annuity payments will be made at a rate of 55 percent of the chosen base amount.
- If the coverage is for spouse and children, the annuity will be paid to the spouse unless the spouse dies or remarries before age 55.
- If the coverage is for multiple children, the annuity will be divided equally between all eligible children.
For up-to-date calculations of premiums and annuity payments, visit http://actuary.defense.gov/LinkClick.aspx?fileticket=H0DVclMASV0%3d&tabid=1733&portalid=15 to download the worksheet provided by the Department of Defense’s Office of the Actuary.
To discontinue SBP payments due to a spouse’s death or divorce, visit http://www.dtic.mil/whs/directives/forms/eforms/dd2656-2.pdf to download DD Form 2656-2, “Survivor Benefit Plan (SBP) Termination Request”.
SBP and Other Survivor Benefits
Until 2008, SBP annuity payments were offset by any Social Security payments received by surviving spouses. This is no longer the case.
If a survivor is receiving Dependency and Indemnity Compensation (DIC), they cannot receive the Survivor Benefit Plan as well.
- If the DIC amount is greater than the SBP annuity, the surviving spouse will be refunded all payments made into the SBP.
If the SBP annuity exceeds the DIC amount, the surviving spouse will receive the difference between the SBP and the DIC and will be refunded some of the payments made into the SBP in proportion to the annuity not received.