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Survivor Benefit Program (SBP) Election Changes

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December 17, 2013

Q. Can I terminate Survivor Benefit Program (SBP) spouse coverage after I retire?
A. Yes…IF you do so during the short window of opportunity. A member participating in SBP, whether an active duty or Reserve retiree, may submit a request to voluntarily discontinue participation in SBP during a one-year period beginning on the second anniversary of the date of commencement of retired pay. For the purposes of this policy, the date of commencement of retired pay is defined as the date the retiree became entitled to receive retired pay. Subsequent recall to active duty following retirement does not alter this date. Contact your SBP manager at your pay agent.

Q. Can an insurable interest election be changed?
A. Yes, to cover a newly acquired spouse or child. The change must take place within one year after marriage or acquiring a child anytime during the same year. An insurable interest election can also be canceled at any time except for an insurable interest election that covers a former spouse. No refund of payments is made at any time if an insurable interest election is canceled.

Q. Can SBP coverage be terminated because of a service-connected disability rated as total by the Department of Veterans Affairs (VA) and the certainty of Dependency and Indemnity Compensation (DIC) for my spouse being payable by the VA?
A. Yes, with the consent of your spouse. In cases where DIC is involved (DIC reduces the SBP annuity dollar for dollar), if the DIC amount is more than the SBP annuity, the surviving spouse is entitled to a refund of all SBP premiums. If SBP exceeds the DIC amount, the surviving spouse will receive the difference between the SBP annuity and DIC, plus a refund of SBP premiums for that portion of the SBP annuity not received.

Once you withdrawal from the SBP program, for whatever reason, you will never be permitted to reenroll, even during a future open season.

Withdrawal can affect future benefits of survivors. MOAA and other organizations are fighting for repeal of the SBP-DIC offset. If the future brings success, members who withdrawal from SBP may not be allowed back into the program. Beginning October 2008, survivors receiving both SBP and DIC payments will receive an additional $50 in their SBP checks from the Special Survivor Indemnity Allowance program. This is a program passed in the 2008 National Defense Authorization Act that starts down the road to minimize the effect of the SBP-DIC offset. The offset reduces a survivor’s SBP payment dollar-for-dollar by the amount of DIC received. The new law provides for a $50 a month reimbursement in your SBP payments beginning Oct 2008 and the amount will increase by $10 each year thereafter for the next 5 years. On Oct 2012, unless the program is changed, survivors will be at the maximum reimbursement of $100 per month.

Q: Is there a law which allows a retiree to be paid up in SBP?
A: Congress authorized a change to the law, effective October 1, 2008, that will end the payment of SBP premiums when a retiree reaches age 70 and has paid into the SBP for 360 months (30 years). If a retiree with less than maximum coverage increased the level of coverage during an open enrollment period or after remarriage, the premiums will continue for the portion that represents the increased coverage for 360 months even after the termination of premiums for the for the original coverage.