Survivor Benefit Plan (SBP) Coverage for Divorce and Remarriage

 Military retirement benefits are designed not only to support servicemembers after their careers end, but also to protect their families. One of the most important programs providing this protection is the Survivor Benefit Plan (SBP), which allows retired servicemembers to pass along ongoing income to a surviving beneficiary after their death. 

Divorce and remarriage may complicate SBP coverage. If you find yourself in this situation, you may have questions about who is now eligible for benefits, how coverage may be changed, and what steps must be taken to protect your current chosen beneficiary.

Continue reading to discover how SBP works in the context of divorce, including coverage for a former spouse and what happens if you remarry.

What Is the Survivor Benefit Plan?

The Survivor Benefit Plan is a government-sponsored annuity program that allows military retirees to provide a portion of their retirement pay to a designated beneficiary after death. It’s one of the most important tools for protecting the financial security of military families.

Key features of SBP include:

• Participation is typically elected at retirement.
• Retirees pay monthly premiums, which are deducted from retirement pay.
• The beneficiary receives up to 55% of the retiree’s covered retirement pay as an annuity.

Common SBP beneficiaries include:

• Spouse
• Former spouse(s)
• Children
• Insurable interest beneficiary

SBP provides long-term financial protection so your surviving loved ones continue to receive income when you pass away.

What Happens to SBP Coverage After Divorce?

Divorce does not automatically cancel SBP coverage, but it does add a layer of complication to coverage. A retiree or former spouse must notify DFAS of the change in marital status. If a servicemember elects spouse coverage at retirement, the former spouse generally loses eligibility following a divorce, unless action is taken.

To maintain coverage for a former spouse, the election must be changed to former spouse coverage.

Voluntary Former Spouse Election

A retiree may voluntarily elect to provide SBP coverage to their former spouse after divorce. This ensures continued financial protection for the former spouse through the divorce agreement or retirement planning.

Court-Ordered Former Spouse Coverage

Divorce settlements or court orders may require continued SBP coverage for a former spouse. In these cases, the retiree is legally obligated to maintain that coverage. Acting quickly after a divorce can help former spouses avoid losing eligibility.

The One-Year Rule

Former-spouse coverage must typically be elected within one year of the divorce. This may occur through:

• The retiree submitting an election
• The former spouse submits a deemed election request if required by a court order

Missing this deadline may result in permanent loss of SBP eligibility for the former spouse. Both parties should verify that the election was processed correctly to guarantee coverage is in place.

How SBP Works If Someone Remarries

Life after divorce sometimes includes remarriage by one or both parties, which introduces additional considerations for SBP coverage.

If There Is No Former Spouse Coverage

If a servicemember does not maintain former spouse coverage, a new spouse may become the SBP beneficiary. Eligibility typically begins after one year of marriage or upon the birth of a child from the marriage.

If Former Spouse Coverage Exists

There are several circumstances to consider if the former spouse has coverage.

If the Servicemember Remarries

If SBP coverage exists for a former spouse, that coverage generally takes precedence over a new spouse. The retiree cannot change coverage to the new spouse unless the former spouse agrees or the court order is modified.

This rule may create confusion for servicemembers entering a new marriage.

If the Former Spouse Remarries

Coverage for the former spouse may continue, even if they remarry, unless specified otherwise in the court order. Former spouse annuitants who remarry before age 55 will have their SBP suspended. If that marriage ends in divorce or remarriage, the former spouse can contact DFAS to continue their SBP.

If Both People Remarry

If both the servicemember and the former spouse remarry, the original SBP coverage obligations generally remain in effect unless modified by the court. Servicemembers should review their orders and seek guidance from legal or retirement services offices to clarify responsibilities.

Can SBP Coverage Be Changed After Divorce or Remarriage?

SBP coverage may be changed in limited circumstances, including:

• Death of the former spouse
• Remarriage of the former spouse before age 55 (in some cases)
• Court orders that allow modifications based on divorce agreements
• Occasional open enrollment periods as authorized by Congress

These opportunities are rare and may involve additional premiums or penalties. That’s why it’s important to carefully review your options and deadlines as soon as you divorce or remarry.

Financial Considerations When Choosing SBP Coverage

SBP elections have important financial implications:

• Premium costs: Typically up to 6.5% of covered retirement pay.
• Long-term income protection: Ensures ongoing support for survivors.
• Comparison to other options: Life insurance policies and other retirement income strategies.
• Impact of divorce settlements: Coverage decisions may affect property division and settlement agreements.

Reviewing SBP as part of a broader financial plan helps both you and your beneficiaries stay protected.

Steps to Take After Divorce or Remarriage

Practical steps to protect SBP coverage include:

1. Review divorce agreements carefully to determine SBP obligations.
2. Notify DFAS and update beneficiary elections.
3. Submit required forms within deadlines.
4. Confirm that the changes were processed and are reflected in the official records.
5. Revisit financial planning with:
• A military financial advisor
• Legal assistance offices
• Retirement services officers

Following these steps helps SBP coverage align with your current life circumstances and provides the intended financial protection for your loved ones.

Members Get More with Armed Forces Mutual

Military finances can get confusing, especially when divorce and remarriage enter the picture. Life insurance can help you create a more secure future for your family, plus Armed Forces Mutual Members enjoy exclusive access to our resources and products created especially for servicemembers, Veterans, and their families. Get a quote today.