The Survivor Benefit Plan
The Survivor Benefit Plan is essentially an insurance plan to ensure income to the surviving non-military spouse. As long as the armed forces personnel is married, they can contribute to the SBP. You can choose the level of the SBP; a full level will provide your surviving spouse with 55 per cent of the income you get when you retire. In the event that your spouse dies, your contribution to the SBP will stop, but you will not get a refund of your contribution. It resumes when you remarry.
In the event that you divorce your spouse, they will still be eligible to receive SBP income unless you nominate someone else as a beneficiary. For this you need the consent of your former spouse as well. An estranged spouse in a military marriage separation is also eligible for SBP benefits. These are over and above any benefits your spouse or former spouse might be entitled to from your pension benefits by virtue of having been married to your during your years of service.
You can also nominate minor children under the SBP. Here children will receive a proportionate share of income depending on your last drawn pay until they turn 18 or 22. Support above the age of 18 is available only to those children who are full-time students.
Claiming SBP Funds
To claim income from the SBP, your surviving spouse needs to show their army ID and your death certificate. The Army records division will then process their request and your spouse and children will receive income adjusted for inflation.
If you have a spouse or dependent children, then enrolling in the SBP will ensure their long-term financial safety even in the event of your premature death. This is because while your pension benefits will stop on the day of your death, the SBP can take over and provide assured income to your family.
While the SBP is fairly straight forward in its aims, there are many legal clauses that can prevent the funds from going to the right beneficiary. This is especially true if you have a former spouse and a current spouse. You need to check with a lawyer familiar with the rules governing SBP to ensure that the survivor’s benefits go to the spouse of your choice. Remember that your former spouse needs to sign on the re-nomination form to make it valid.