How Much Does the Survivor Benefit Plan (SBP) Cost?
Understand the factors and calculations behind the cost of the military Survivor Benefit Plan (SBP) premiums.
The Survivor Benefit Plan (SBP) is a government program providing a continuous income to eligible military survivors after a service member’s death. It functions as an annuity, offering financial protection to beneficiaries by replacing a portion of retired pay that ceases upon the retiree’s passing. Understanding SBP costs is important for military members approaching retirement.
Basic SBP Cost Structure
The cost of participating in the Survivor Benefit Plan is a premium, typically deducted monthly from the retiree’s gross retired pay. This premium is a percentage of a chosen “base amount” of retired pay. The base amount can range from $300 per month up to the full gross retired pay. The specific percentage varies by beneficiary type. SBP premiums are not subject to federal income tax, which effectively lowers the out-of-pocket cost by reducing taxable income.
Calculating Your SBP Premium
The SBP premium calculation depends on the designated beneficiary and eligibility criteria. For most service members who entered active duty after February 28, 1990, the premium for spouse or former spouse coverage is 6.5% of the elected base amount.
An alternate two-tier calculation may apply for those who entered active duty on or before February 28, 1990, reserve component members with non-regular retirement, or disability retired service members. Under this formula, the premium is 2.5% of an initial indexed amount ($1,056 for 2025). The remaining portion of the elected base amount above this threshold is charged at 10%. This often results in a lower premium for base amounts below approximately $2,262.86.
For example, if a retiree selects a base amount of $3,000 for spouse coverage and falls under the general 6.5% rule, their monthly premium would be $195 ($3,000 x 0.065). If they qualify for the alternate calculation and choose the same $3,000 base amount, their premium would be 2.5% of $1,056 ($26.40), plus 10% of the remaining $1,944 ($3,000 – $1,056 = $1,944), which is $194.40. The total premium under this alternate method would be $220.80 ($26.40 + $194.40).
Premiums for child-only coverage are determined by actuarial factors, primarily the member’s age and the age of the youngest eligible child. Specific cost estimates are obtained through an SBP counselor or online calculators. The annuity for child-only coverage is 55% of the chosen base amount, divisible equally among eligible children.
Insurable interest coverage allows naming a non-spouse or non-child beneficiary. For this coverage, the base amount must be the service member’s full gross retired pay. The premium is 10% of this full retired pay, with an additional 5% for every full five-year period the beneficiary is younger than the retiree. The total cost is capped at 40% of the retired pay. For example, if a retiree’s full retired pay is $4,000 and the insurable interest beneficiary is 13 years younger, there are two full five-year periods. The premium would be 10% of $4,000 ($400) plus an additional 10% (2 x 5%) of $4,000 ($400), totaling $800 per month.
Factors Affecting SBP Costs
Several factors influence SBP premiums. Electing a base amount less than the maximum full gross retired pay directly impacts the premium, as cost is a percentage of elected coverage. A lower base amount results in a lower premium but also a proportionally lower annuity.
Changes in beneficiary status affect SBP premiums. If a spouse remarries before age 55, or a child reaches ineligibility (18 or 22 if a full-time student), premiums for that coverage are suspended. If a beneficiary dies, SBP deductions terminate. The service member must notify the Defense Finance and Accounting Service (DFAS) for premium adjustments.
Cost-of-Living Adjustments (COLAs) applied to military retired pay also influence SBP premiums. Since premiums are a percentage of the base amount, and the base amount increases with COLAs, the monthly premium will also increase.
The “paid-up SBP” provision is a long-term factor. Premiums cease after a retiree has made 360 monthly payments (30 years) and reached 70 years of age. Once both conditions are met, no further premiums are collected, but SBP coverage continues. Since January 1, 2023, the full SBP annuity is payable to eligible surviving spouses in addition to any Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs.
Payment and Deduction of SBP Premiums
SBP premiums are collected through automated deductions from the retiree’s monthly gross retired pay, beginning upon retirement. The Defense Finance and Accounting Service (DFAS) manages these deductions.
If a retiree’s gross retired pay is insufficient to cover the SBP premium, such as when retired pay is waived for Veterans Affairs (VA) disability compensation, premiums may be deducted from other sources. DFAS can deduct SBP premiums from Combat-Related Special Compensation (CRSC) if retired pay is inadequate. Retirees can also arrange direct remittance to DFAS, or premiums can be deducted from VA disability payments with authorization.
Changes to SBP election or beneficiary information, which affect the premium, require communication with DFAS.