What Is SBP? The Survivor Benefit Plan Explained

SBP: Cost, Coverage, and the DIC Offset

The Survivor Benefit Plan (SBP) is a government-subsidized annuity program that provides a monthly income to a surviving spouse after a military retiree's death.

Cost and Coverage

• Premium: 6.5% of the elected "base amount" — which can be set at the full retired pay amount or a reduced portion chosen at retirement.
• Annuity: The surviving spouse receives 55% of the elected base amount per month for life.
• COLA: SBP annuity payments receive annual Cost of Living Adjustments, preserving purchasing power over time — a key advantage over a fixed life insurance payout.

The DIC Offset Elimination (2018–2023)

Prior to 2023, surviving spouses who received both SBP and Dependency and Indemnity Compensation (DIC) from the VA had their SBP reduced dollar-for-dollar by the DIC amount — this was known as the "widow's tax." The National Defense Authorization Act of 2020 phased out this offset over three years. As of January 1, 2023, surviving spouses receive both SBP and DIC in full with no offset.

Key SBP Rules

• Irrevocability: SBP elections made at retirement are generally permanent. A spouse must provide written concurrence if the retiree declines or reduces coverage.
• Remarriage rule: A surviving spouse who remarries before age 55 loses SBP. If that remarriage later ends (divorce or death), SBP is reinstated.
• Paid-up SBP: After 30 years of premium payments AND reaching age 70, premiums stop automatically while full coverage continues for life.

SBP vs. Life Insurance

SBP provides inflation-adjusted lifetime monthly income to a surviving spouse, while life insurance provides a one-time lump-sum payout. Many financial planners recommend evaluating both: SBP protects against a surviving spouse outliving a lump sum, while life insurance addresses immediate liquidity needs at death. Learn more about benefits for surviving family members at VA Survivor Benefits and DIC Benefits.

Is SBP Worth It? Pros and Cons

SBP is worth it for most retirees with a spouse or young children, because no private life insurance policy matches its lifetime, inflation-protected payout for a flat 6.5% premium. The right call still depends on your health, your spouse's age, and how much other survivor income you already have lined up.

Reasons SBP usually wins

• No medical exam. You get full coverage even with a serious health condition that would raise or deny a private life insurance policy.
• Inflation-adjusted for life. Annual COLA increases keep the annuity's buying power steady decade after decade — a fixed life insurance death benefit does not do this.
• Government-backed. Payments come from the U.S. Treasury, not an insurer's claims-paying ability.

Reasons some retirees skip or reduce it

• The payout is taxable. A term life insurance death benefit is not — see the full breakdown in our SBP vs. life insurance tax comparison.
• Premiums run for life unless you hit the paid-up threshold: 30 years of payments and age 70.
• Healthy retirees with cheap term insurance can sometimes buy a larger death benefit for less money in their 40s and 50s, though that gap narrows — or reverses — as term premiums climb with age.

Run your own base-amount and premium numbers with our SBP cost calculator guide before deciding.

How to Elect, Change, or Cancel SBP

You elect SBP on DD Form 2656 at retirement, and after that the rules for changing your mind get strict fast.

Electing at retirement

SBP defaults to full spouse coverage unless you and your spouse both sign to reduce or decline it. A married retiree who wants anything less than full coverage needs written spousal concurrence — the government assumes you want to protect your spouse unless you both say otherwise.

Changing coverage later

Adding a new spouse or child opens a one-year window to add them to coverage using DD Form 2656-6. Miss that window and you're locked out until the next qualifying event — the last SBP open season, which let retirees enroll or drop coverage outside the normal rules, ran under the 2023 NDAA and closed January 1, 2024, so barring new legislation, a missed window means waiting for a life event.

Canceling SBP

You can only cancel between the 25th and 36th month of receiving retired pay, using DD Form 2656-2, and your spouse must sign off if they're the covered beneficiary. Once you cancel, you cannot re-enroll — there's no do-over. Coverage stops the first day of the month after DFAS processes the request.

Questions about your specific paperwork? See our guide to reaching DFAS and a retirement counselor.

What Happens to SBP After Divorce

Your former spouse keeps SBP coverage only if a court order requires it or you voluntarily elect former-spouse coverage — divorce does not carry spouse SBP over automatically. The election (or a request to enforce a court-ordered one) has to reach DFAS within one year of the divorce, or your ex-spouse permanently loses eligibility.

Once former-spouse SBP is elected, it's irrevocable — you cannot switch it back to a new spouse if you remarry later. For the full picture on what a former spouse keeps after a military divorce, including TRICARE, retired-pay division, and DIC, see our military spouse benefits after divorce guide.

SBP Beneficiary and Coverage Options

SBP covers one of three beneficiary types — spouse only, spouse and child, or child only — and you pick at retirement, which limits who can ever receive the annuity.

• Spouse coverage: pays your spouse 55% of the covered base amount for life, unless they remarry before age 55.
• Spouse and child coverage: pays the spouse that same annuity, with children stepping in only if the spouse becomes ineligible (for example, after remarriage) or isn't the surviving parent.
• Child-only coverage: pays eligible children directly, split evenly, until they turn 18 (or 22 as a full-time student).

Coverage for a disabled child

A child disabled before age 18 (or before 22 while a full-time student) can receive SBP for life, as long as they stay unmarried and the disability keeps them from supporting themselves. A 2015 law change lets that benefit flow into a special needs trust instead of directly to the child, which keeps the annuity from disqualifying them from means-tested programs like Medicaid or Supplemental Security Income. Setting up the trust option takes a written election plus an attorney's certification filed with DFAS, and like other SBP elections, it's permanent once made.

SBP Across Branches, and Why It's Not the Same as FERS

SBP rules are identical across the Army, Navy, Air Force, Marine Corps, Space Force, and Coast Guard — the 6.5% premium and 55% annuity don't change based on your branch.

Guard and Reserve retirees use a variant called the Reserve Component SBP (RC-SBP), because their retired pay doesn't start until age 60. RC-SBP lets a Reserve or Guard member with 20 qualifying years elect coverage during the "gray area" — the stretch between leaving service and turning 60 — so a survivor is protected even if the member dies before retired pay begins. Premiums for the gray-area period aren't collected until retired pay starts.

SBP is not the same program as the FERS Basic Employee Death Benefit. If you also work a federal civilian job under the Federal Employees Retirement System (FERS) after your military career, that job carries its own separate survivor benefit — the FERS Basic Employee Death Benefit — funded and administered by OPM, not DFAS. Electing or declining military SBP has no effect on a FERS death benefit, and vice versa.