However, a spouse loses eligibility as an SBP beneficiary upon divorce. In , 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 you elect higher SBP payments on your death your monthly payments while you are alive will be higher. The surviving spouse be a widow or widower who was married to you when you enrolled. If you marry later, you can add your spouse, but they must be married to you for at least one year prior to your death to get any benefits.
You can also elect to cover your children under this category of coverage. This coverage pays to your spouse while they are alive. If they die before you it will pay to your children after your death. This option pays the SBP only to your children regardless of whether you are married or not. Your children will get the SBP until they turn 18 or age 22 if a full-time, unmarried student.
Children mentally or physically incapable of self-support remain eligible, while unmarried, for as long as the incapacitation exists. A SNT is a trust designated for beneficiaries who are disabled, either physically or mentally. It is written so the beneficiary can enjoy the use of property that is held in the trust for his or her benefit, while at the same time allowing the beneficiary to receive essential needs-based government benefits.
Terminating coverage — As a plan participant, you have a one-year window to terminate SBP coverage between the second and third year following the date you began to receive retired pay. However, once you terminate SBP coverage, it cannot be reinstated. Coverage for an insurable interest may be terminated at any time.
You can get more information about plan basics from the Office of the Secretary of Defense Military Compensation page. The appearance of hyperlinks does not constitute endorsement by the Department of Defense of non-U. He also uses a projected rate for future earnings. According to my napkin math, this projected rate appears to be 2.
In this illustration, you can see that there is no scenario where this payout does not last 40 years. At the year Treasury rate of 2. In addition to providing a means for a steady income, an insurance policy gives you flexibility to address immediate needs…SBP cannot offer this. Although these projections seem outlandish, they may not be, as longevity increases keep pushing the boundaries of our life expectancies.
There are plausible situations where my wife could outlive me by years, and need income into her s. However, that scenario is not as much of a concern to me as the liquidity and immediate cash flow concerns. However, if I predecease my wife by 30 years or more, she might be better off with SBP. With that said, 30 years gives Tania plenty of time to take control of her life after my demise, and to find the help she needs to take move forward with her financial life.
Again, this article does not seek to persuade you into one decision or another. However, it does aim to show you an expanded definition of peace of mind. In my situation, peace of mind comes from the fact that:. Recognize this is a bit longer than my normal posts, but I hope you appreciate it. However, you should run this scenario for yourself and come to your own conclusion.
As always, this blog serves to answer your questions and address concerns. If you like this blog, please forward it on to other people who may benefit.
For more in-depth reading, you can check out the book I wrote, Guide to the Survivor Benefit Plan , which is available on Amazon.
0コメント