Retiring service members and their spouses MUST learn about the Survivor Benefit Plan before they make a decision. The choice whether to purchase the military’s Survivor Benefit Plan (SBP) coverage may be the largest financial decision of your life.
As I’ve discussed extensively, it is a very individual decision and there is no best answer for every situation. While I’m trying to hit on every possible consideration, it is important that you get information from a wide variety of sources. I recommend the following resources for the three distinct phases of the decision-making process: education, analysis & consideration, and individual decisions.
This post is part of a larger series about the Survivor Benefit Plan. Here’s the complete list of posts.
Everything About The Survivor Benefit Plan
Life Insurance or SBP? Asking The Right Questions
Retiring Military: Should You Choose SBP?
The Survivor Benefit Plan (SBP) “Payback” Period
From The Mailbag: Term Life Instead of SBP
From The Mailbag: SBP When You Marry After Retirement
Education
In this stage of the process, you are gathering all the facts about SBP: what it is, how it works, etc.
- The SBP classes held at your installation’s family readiness center. Keep in mind that some classes are better than others – this should not be your only resource.
- Navy Mutual’s website: https://www.navymutual.org/mission-educate/survivor-benefit-plan/
- Navy Mutual’s great monthly webinars – flyer to the right
- The DoD Military Compensation website’s SBP webpages: https://militarypay.defense.gov/Benefits/Survivor-Benefit-Program/
- The Defense Finance and Accounting Service (DFAS) SBP webpages: https://www.dfas.mil/retiredmilitary/provide/sbp.html
- The Department of Defense Financial Management Regulation, Volume 7B, Chapters 42-46, 49, and 54: https://comptroller.defense.gov/FMR/vol7b_chapters.aspx
- The Department of Defense Office of the Actuary Survivor Benefit Plan pages: https://actuary.defense.gov/Survivor-Benefit-Plans/
- This great (if old) history of SBP and the nuances of the various rules. It’s not up-to-date, but it helps to understand the background. Bonus: written in plain English! The Military Survivor Benefit Plan: A Description of Its Provisions
Analysis and Consideration
During this phase of the process, you are taking the various factors of the SBP and looking at them from different perspectives to ensure that you not only know the facts, but understand how they can play out in various situations. Here are some places to look:
- The book Military in Transition’s Guide to The Survivor Benefit Plan: Navigating the SBP. Written by a financial planner who also happens to be a retired Navy guy, this book looks at all aspects of the SBP decision making process.
- MOAA’s Should You Enroll In The Survivor Benefit Plan?
- Five Reasons to be Impressed With The Survivor Benefit Plan
- Term Insurance vs. Survivor Benefit Plan (SBP) – A Side-by-Side Comparison
- The Department of Defense’s Office of the Actuary has a remarkable set of Excel calculators.
Individual Decisions
Once you have a firm grasp of the facts of the SBP program, and the various considerations, then you need to apply this information to your family’s specific situation. This includes your other streams of income, your assets and liabilities, children, special needs, spousal employment and employability, health history, ages, goals, wishes, and desires. And don’t forget the “sleep at night” factor – the SBP decision has an emotional component, as well.
- The financial educator at your installation’s family readiness center. This person should be well-versed in SBP, but that isn’t always true. Plus, as individuals, we all bring our own biases to the conversation. While this is a great resource to figure out how to apply the SBP offer to your unique financial situation, please don’t expect (or let) the financial educator make the decision for you.
- Online or telephone financial education is available through Military One Source. Same warning as above. some MOS counselors are great, some not so much.
- The retirement planning calculators are available at the Navy Mutual Aid Association website: https://calculators.navymutual.org/Default.aspx?Calculator=Baseline
- If you’ve exhausted all these resources, and you still aren’t confident in your decision, then you may benefit from the help of a fee-only financial planner who understands military benefits. Be careful, though, that the financial planner doesn’t have a financial interest in steering you away from SBP and towards a product that will give them a commission. A good place to look for a fee-only planner who understands the military is the Military Financial Advisors Association.
This list is definitely not comprehensive, and I intend that it will grow as I continue to find more resources. If you have suggestions, please drop them in the comments. Together we can learn more!
Other Posts About The Survivor Benefit Plan
This post is part of a larger series about the Survivor Benefit Plan. Here’s the complete list of posts.
Everything About The Survivor Benefit Plan
Life Insurance or SBP? Asking The Right Questions
Retiring Military: Should You Choose SBP?
10+ Places To Learn About The Survivor Benefit Plan
The Survivor Benefit Plan (SBP) “Payback” Period
From The Mailbag: Term Life Instead of SBP
From The Mailbag: SBP When You Marry After Retirement
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Great article Kate!!
Thanks! I hope that we can get the word out!
I don’t remember and can’t seem to find the answer,
But can a member with eligible children only elect spouse coverage at retirement or must it be spouse and children or only children?
If as the spouse I waived my coverage at retirement, could we also elect not to cover the children or is that required to still cover eligible children?
Now becoming a divorce issue.
Chris – if you are married with children at retirement, you may choose spouse only, spouse and children, or child only coverage. There is no requirement to cover anyone at retirement. I hope that helps.
My spouse chose the survivor benefit plan upon his retirement. We were divorced 20 years later but continued to pay the survivors benefit plan which was paid in full after 30 years. My exspouse died last month. Where do I go to start getting payments under thee survivor benefit plan?
After your divorce, did your ex-husband or you re-enroll you in the SBP as a former spouse?
The application and instructions for SBP benefits can be found here: https://www.dfas.mil/retiredmilitary/survivors/ApplySBP.html
I hope that helps!
How do I find out how much I might be entitled to SBP wise? My former husband and I divorced after he retired and I haven’t a clue about the SBP, one of us doesn’t want to talk to the other. I’m just trying to get a handle on this to try and do a little prior planning on the off chance I outlive him.However, given all the health issues I have and he doesn’t, I will probably predecease him.
Thank you for any guidance.
Rhonda, how long have you been divorced? Was SBP listed in your divorce decree? Any former spouse coverage, either voluntary or court ordered, under SBP must be elected within one year of divorce/court order.
We were divorced in 2004 and the SBP is listed in the decree which states that my ex husband is required to provide DFAS with a certified of the decree and can not modify the SBP in anyway. I would just like to know how to find out the ball park amount I might be able to expect. I know my ex has some portion of of disability. I don’t know how much. It was awarded after our divorce. We have not always talked and he would never discuss money with me at all, even when we were talking. Thank you for responding. Any additional directions about who to contact and what to ask would be greatly appreciated.
Rhonda, I am 73 and I have fully paid for my SBP. My wife died in 2018. Can I now provide the SBP to my 6 year old and 15 month old grandchildren that I fully support. I support Grandchildren and their parents.. I called DFAS and was told no, but I have hear that it is possible from other sources. What do you say. Thank you!