Do I Need the Survivor Benefit Plan?

The Survivor Benefit Plan (SBP) is a survivor annuity policy offered by the military. It is designed to protect your right to receive your husband’s retirement in the event that he dies. These days, the average life expectancy of an American man is 75 years, and the average life expectancy of an American woman is 80 years. It’s definitely something to think about!

If you are getting divorced and may receive a large chunk of your husband’s military retirement, it’s probably a good idea to elect to participate in the SBP. By choosing to participate, you can protect up to 55% of the total retirement check. Of course, there’s also a premium associated with this extra layer of protection. To participate, it costs 6.5% of the base amount your husband chooses.

If you’re negotiating a separation agreement with your husband, you should ask that your husband be required to choose the maximum amount of base pay possible, so that the maximum retirement income available is reserved for you. These premiums are taken automatically off the top, and usually both parties share in paying the premium. I’ve had husbands refuse to agree to provide SBP coverage unless my client was willing to pay the entire premium. Still, it’s really not a bad deal (particularly if he’s already disabled).

It’s a little bit expensive, but it also provides an extra layer of security for you to help ensure that you’ll receive your share of the retirement no matter what happens in the future. Since you don’t have a crystal ball, it can’t hurt to put something in place to protect your interests. Keep in mind, too, that you won’t have to continue to pay premiums forever. SBP premiums are paid for a maximum of thirty years and after that, it is paid in full.

In addition to the cost of participation, there are a few other little catches associated with the SBP. First of all, your SBP could be suspended if you remarry before the age of 55 (it can also be reinstated if you end up not married later on, provided that the SBP hasn’t been awarded to someone else in the meantime—like, for example, your husband’s new wife). You also have a deadline. In order to participate in the SBP, you must send your final decree and SBP request within 1 year from the entry of the final divorce decree or 1 year from retirement.

It may definitely be worth your while to consider electing to participate in the Survivor Benefit Plan.

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