Aging Parents.jpg

Survivor Benefit Plan -SBP

If there is one thing that transitioning servicemembers remember is the fact that when a military retiree dies their retirement pay stops. This means that the surviving spouse will be left without a substantial income source. 

The Survivor Benefit Plan (SBP) is an efficient and relatively inexpensive way to guarantee money for the surviving spouse. Election to participate in the Survivor Benefit Plan is generally made at the time of retirement. Enrollment in an annuity plan is not automatic and there are costs.


If you are enrolled you will pay premiums for your SBP coverage. In most cases, costs to participate are deducted from the retiree's monthly pay and are based on the amount of coverage a retiree elects. Premiums are paid out of retirement check with pre-tax dollars. Please note that you can elect a lower level of SBP coverage. There is, however, a minimum level of coverage required and that the amount is unique to each retiree. In addition, you can only leave an annuity to eligible beneficiaries. No lump sums amounts are payable.


  • You will leave a guaranteed income to your beneficiary: Eligible beneficiaries under the plan will receive 55 percent of the retiree’s elected amount of coverage.

  • SBP benefits are inflation indexed, and coverage and cost are not affected by illness or age: Unlike many private life insurance policies, SBP coverage will not be cancelled or revoked due to any illness you may have or your age.  Whether you retire at age 45 or 80, you or your spouse’s age or health will never be considered a liability and never impact the cost of the program.  In addition, the receipt of survivor benefits will not be affected by Social Security benefits. Finally, the SBP annuity is protected against inflation, increasing each December with a Cost of Living Adjustment based on the Consumer Price Index. 

  • You can pay for SBP benefits with a pre-tax payroll deduction: For nearly all retirees, Survivor Benefit Plan premiums are automatically deducted from your gross pay prior to the deduction of federal income tax. This decreases your total taxable income.


  • Cost: SBP coverage is supplied at no cost while you are in active service.  During your retirement, however, a monthly deduction is taken from your pay to pay for your SBP coverage. This can be as much as, but no more than, 6.5 percent of your gross retired pay. You might consider the relationship between the cost of the program and its benefits.  To earn an even return on your investment, your beneficiary typically must receive payment for seven months for every five years you pay SBP premiums.. 

  • Once you enroll, changing your election is difficult: Although it may seem unnecessary to consider providing for your loved ones until later on in life, please be aware that the decisions you make at retirement regarding your SBP can be difficult to change.  For example, if, at retirement, you have an eligible spouse or children and decide not to have them covered under the plan, it will be very difficult to have your current or any future spouse or children covered under the plan in the future.

Eligible Beneficiaries

Retiring Transitioning Serviicemembers can designate the following as beneficiaries on the Data for Payment of Retired Personnel form (DD 2656)when applying for retirement:

  • Spouse

  • Legal children

  • Former Spouse (Special Rules Apply

  • Natural Interest Person (NIP)

For current details on beneficiaries. Go To Defense Finance and Accounting Service-DFAS website: Eligible Beneficiaries