The Survivor Benefit Plan (SBP) provides a monthly inflation-adjusted income annuity to eligible beneficiaries when an active duty servicemember dies in the line of duty or a retiree who has opted in to the program passes away. While military retirees receive a monthly pension for life, the pension stops upon their death. The Survivor Benefit Plan offers a way to preserve part of that income for an eligible beneficiary.
Servicemembers on active duty are automatically enrolled in SBP, but when they retire, they are given the choice of whether to continue their enrollment and are given the option to select an eligible beneficiary – a spouse, child, or insurable interest. Retirees with no eligible spouse or child beneficiaries at the time of their retirement do have the option to opt in later, but they must do so within one year of gaining an eligible beneficiary (through marriage, birth, or adoption). Retirees who have eligible beneficiaries at the time of retirement and choose not to opt in to SBP cannot get coverage for those beneficiaries or any future beneficiaries in those categories after they retire.
It is similarly difficult to terminate SBP coverage once elected. Terminating coverage is an irrevocable decision that can only be made during a one-year window between the second and third anniversary following the date the retiree began to receive retired pay. None of the premiums paid will be refunded and no annuity will be payable upon death. Furthermore, a spouse or former spouse beneficiary must consent to withdrawal from SBP.
However, the 2023 National Defense Authorization Act created a Survivor Benefit Plan open enrollment period, called the SBP Open Season. The SBP Open Season began on December 23, 2022, and ends on January 1, 2024, and allows certain eligible retirees who were not enrolled in SBP or RC-SBP (as of December 22, 2022) to enroll by paying retroactive premium costs, and allows those who were enrolled as of December 22, 2022, to permanently discontinue their coverage. To be eligible for options offered in the open enrollment period, retirees must have been receiving retirement pay, or, in the case of a reservist, eligible to receive retirement pay as of December 22, 2022. Open seasons are rare occurrences and there is no guarantee whether or when another one will occur.
Note: The 2023 Open Season does not allow an SBP member to change their elected amount of coverage or adjust their beneficiary election; they can only opt in or opt out of SBP.
How to Enroll in SBP
A retiree who is not enrolled in SBP but would like to obtain coverage must first submit a Letter of Intent to Enroll (LOI) in order to obtain an estimate of monthly premium pricing and an estimate of the one-time buy-in premium required. Retirees will be required to choose their beneficiary or beneficiaries and state their elected base amount (between $300 and the retiree’s full gross retirement pay). Submission instructions vary by branch of service and retirement status, and are detailed on the form.
Note: The LOI is not the final form required to enroll and is missing some information. For example, there is no option to choose as a beneficiary an incapacitated adult child. Retirees should provide extra information if special circumstances apply so that DFAS can take it into account when calculating premiums.
After submitting their LOI, a retiree will receive a personalized estimate for their monthly premium cost and the buy-in premium. Provided a retiree submits their official enrollment paperwork close to the time their LOI was submitted, the estimate is likely to be accurate. If a retiree waits, these prices could shift.
Once a retiree chooses to enroll in SBP, they must submit the Open Enrollment Election Form. With this form, they must also choose how they will pay the buy-in premium. It can be paid in a single, lump-sum payment; over 12 equal monthly installments, plus interest, to be deducted from their retirement pay; or a combination of the two (e.g., paying half of the buy-in premium up front and paying the other half in 12 equal monthly installments, plus interest, to be deducted from their retirement pay). Like the LOI, submission instructions vary by branch of service and retirement status, but retirees generally have the choice of submitting their enrollment form online through askDFAS, via fax, or by mail.
After a retiree’s application is processed, they will receive confirmation of their enrollment, a breakdown of the costs associated with their enrollment (including their monthly premium cost and their one-time buy-in premium cost), and instructions on how to submit payment. Monthly premiums are deducted from a retiree’s retirement pay and are paid in pre-tax dollars, decreasing the retiree’s annual taxable income, and, therefore, the net cost of SBP. Buy-in premiums can be paid by bank draft or deducted from a retiree’s retirement pay and are not tax-free.
SBP coverage is effective on the first of the month following DFAS receipt of the retiree’s enrollment form.
A retiree who changes their mind about enrolling must cancel their enrollment in writing within 30 days from the date they signed their enrollment form.
Note: SBP is considered paid up when a retiree has completed 30 years of payments and turned 70 years old. The buy-in premium does give a retiree credit for years paid in terms of satisfying both of these requirements.
How to Terminate SBP
If a retiree with current SBP coverage as of December 22, 2022, determines that they would like to withdraw from the plan, they must get consent from their spouse and any beneficiary who is at least 18 years old. No premiums will be refunded and retirees will not get the chance to reenroll in the Survivor Benefit Plan.
Retirees who wish to discontinue coverage can start by downloading a 2023 Discontinuance Form. Signatures of the retiree and their spouse and/or adult beneficiaries must be notarized or witnessed by an SBP counselor to be considered valid. Once signed, the form can be submitted in one of three ways:
- Uploaded to askDFAS
- Faxed to 800-469-6559
- Mailed to:
- Defense Finance and Accounting Service
U.S. Military Retired Pay
8899 E. 56th Street
Indianapolis, IN 46249-1200
- Defense Finance and Accounting Service
Note that individuals currently serving in the Reserves or National Guard as well as grey area retirees may need to follow different procedures and should contact their branches of service for additional information.
For more information about the Survivor Benefit Plan and SBP Open Season, contact the Navy Mutual education team at education@navymutual.org or 888-298-4442.