The Survivor Benefit Plan (SBP) is an insurance benefit that pays a portion of a military retiree's pay to a named beneficiary when the retiree dies. Without an SBP plan, all of the former military member's retirement pay would stop at the death of the retiree. The plan, which is partially funded by the government, is paid for by monthly deductions from the retired pay of the member. The amount of the premium depends on the percentage of the retired pay that will be paid to the beneficiary. The maximum amount of coverage pays the beneficiary 55% of the member's gross retired pay.
Many beneficiaries are spouses of former military members. However, a spouse loses eligibility as an SBP beneficiary upon divorce. In 1984, Congress amended the law to allow coverage for former spouses, in some circumstances.
This coverage may be voluntary or involuntary, but it is never automatic. In other words, whether former spouse SBP coverage happens by agreement of a divorcing couple or by order of the court, it must be elected. Even if a military retiree had SBP coverage naming his spouse as beneficiary, the retiree must convert that coverage to the same beneficiary as a former spouse. The retiree must apply for this change of status (from spouse to former spouse) within one year of the divorce.
The spouse may also request SBP coverage in a divorce action. If coverage of a former spouse is ordered by a court, and the member then fails or refuses to make the required election, that member shall be deemed to have made such an election if the service finance center receives a written request from the former spouse asking that the election be made.
If the former spouse remarries before the age of 55, coverage is suspended. If the subsequent marriage is terminated by death or divorce, coverage is resumed. As long as the former spouse is alive, the member may not name a current spouse as a beneficiary unless the former spouse waives the benefit in writing.
Note: Slightly different rules apply for members of the reserve forces and national guard.