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.
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:
Common SBP beneficiaries include:
SBP provides long-term financial protection so your surviving loved ones continue to receive income when you pass away.
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.
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.
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.
Former-spouse coverage must typically be elected within one year of the divorce. This may occur through:
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.
Life after divorce sometimes includes remarriage by one or both parties, which introduces additional considerations for SBP 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.
There are several circumstances to consider if the former spouse has coverage.
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.
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 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.
SBP coverage may be changed in limited circumstances, including:
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.
SBP elections have important financial implications:
Reviewing SBP as part of a broader financial plan helps both you and your beneficiaries stay protected.
Practical steps to protect SBP coverage include:
Following these steps helps SBP coverage align with your current life circumstances and provides the intended financial protection for your loved ones.
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.