Survivor Benefit Plan (SBP) 2026: What It Is, What It Costs and What It Pays

• What Is SBP?
• Who Can Elect SBP?
• Who You Can Cover
• How Much Does SBP Cost in 2026?
• How Much Does SBP Pay?
• Paid-Up SBP: When Premiums Stop
• SBP and VA DIC: The End of the Widow’s Tax
• SBP vs. Life Insurance
• Reserve Component SBP (RCSBP)
• Making Your SBP Election
• Can You Change or Stop SBP Later?
• How Survivors Claim SBP
• Frequently Asked Questions

Military retired pay stops the month a retiree dies. For a spouse who has planned around that check, the loss can be immediate and permanent. The Survivor Benefit Plan (SBP) is the Defense Department’s answer: an annuity that keeps paying your spouse, children or another eligible beneficiary a share of your retired pay for the rest of their life.

It is also one of the biggest money decisions you make at retirement, because the election is mostly locked in once your first retired-pay check arrives. This guide explains what SBP is, what it costs in 2026, what it pays, how it interacts with VA benefits, and how to decide between SBP, life insurance or both.

What Is SBP?

SBP is a survivor annuity attached to military retired pay. You choose a base amount — anywhere from $300 a month up to your full retired pay — and pay a premium out of each retired-pay check. When you die, your beneficiary receives 55% of that base amount every month.

Three features make it different from anything you can buy on the private market. Payments are lifelong for a spouse. They rise with inflation, because by law the base amount increases by the same percentage as retired pay each year (10 U.S.C. 1451(h)). And there is no medical underwriting: your health at retirement doesn’t affect the price or your eligibility.

Congress created SBP in 1972. The program is partly subsidized by the government, which is why the premium is usually lower than what a commercial annuity with the same guarantees would cost. Our military retirement pay guide explains how the retired pay that SBP is built on is calculated.

Who Can Elect SBP?

Anyone entitled to military retired pay can elect SBP:

• Active-duty retirees with 20 or more years of service, under High-3 or the Blended Retirement System
• Medical retirees, including those placed on the temporary or permanent disability retired list
• Guard and Reserve members, who make a separate Reserve Component SBP election when they receive their 20-year letter (see RCSBP below)

Service members who die on active duty are covered without any election or premium. Their survivors receive an annuity figured as if the member had retired with a 100% disability rating on the date of death.

Who You Can Cover

Spouse

Spouse coverage is the most common choice and the default for anyone married at retirement. A surviving spouse receives the annuity for life. If the spouse remarries before age 55, payments stop; they can resume if that later marriage ends through death or divorce. A spouse who remarries at 55 or older keeps the annuity.

Spouse and children

Adding children costs a small extra amount. The spouse is paid first; the children receive the annuity only if the spouse dies or loses eligibility.

Children only

Children are eligible while unmarried and under 18, or under 22 if they are full-time students. A child who becomes incapable of self-support because of a disability that began before those ages stays eligible for life. Eligible children split the 55% annuity equally, and premiums for child coverage stop once no child is eligible (DoD Military Compensation).

Former spouse

You can cover one former spouse, and divorce decrees often require it. Former-spouse coverage replaces current-spouse coverage; you can’t have both.

Insurable interest

If you are unmarried and have no more than one dependent child, you may cover a person with an insurable interest in your life: a relative closer than a cousin, or someone who would be financially affected by your death. It costs far more than spouse coverage — see the cost table below — but unlike most SBP elections it can be voluntarily ended unless the covered person is a former spouse (DoD Military Compensation).

How Much Does SBP Cost in 2026?

Premiums come out of gross retired pay before federal income tax, which lowers the real cost. The rules from DoD Military Compensation:

Example. A retiree with $3,000 a month in retired pay who elects full spouse coverage pays 6.5% of $3,000, or $195 a month. Because the premium comes off before tax, someone in the 22% federal bracket saves about $43 in tax, so the cost after tax is about $152 a month.

You can lower the premium by choosing a smaller base amount, but the annuity shrinks in proportion. Anything below full coverage requires your spouse’s written consent.

How Much Does SBP Pay?

The annuity is 55% of the base amount, paid monthly to the beneficiary. Using the example above, a $3,000 base amount produces a $1,650 monthly annuity for the surviving spouse.

Figures are monthly and before tax. The two-tier rule for pre-March 1990 members can make the premium slightly lower than shown.

Cost-of-living increases

Both the base amount and the annuity rise each year by the same percentage as retired pay. The 2026 adjustment was 2.8%, effective December 1, 2025. For 2027 the adjustment is 3.6%, effective December 1, 2026, and first paid in January 2027. Because the base amount grows, your premium grows with it, but always at the same 6.5% of a larger number.

Taxes on the annuity

SBP payments are taxable income for federal purposes. States differ: many that don’t tax military retired pay also exempt survivor annuities, and some tax them. Our veteran benefits by state guide shows how each state treats military retired pay.

Paid-Up SBP: When Premiums Stop

Premiums stop once you meet both conditions: you are at least 70 years old, and you have paid premiums for 30 years (360 months). Coverage continues in full after that, and DFAS stops the deduction on its own.

Most 20-year retirees start paying in their early 40s, so 30 years of premiums is usually the binding condition. Your beneficiary is fully covered from the first month either way; paid-up status only changes when you stop paying.

SBP and VA DIC: The End of the Widow’s Tax

When a retiree’s death is service-connected, the surviving spouse can also qualify for VA Dependency and Indemnity Compensation (DIC). For decades SBP was reduced dollar for dollar by any DIC paid, an offset survivors called the Widow’s Tax.

The FY2020 National Defense Authorization Act repealed the offset in three steps: one-third of the reduction was restored in 2021, two-thirds in 2022, and the offset ended completely on January 1, 2023, according to TAPS. Survivors who qualify for both now receive full SBP and full DIC. The basic DIC rate for a surviving spouse is $1,699.36 a month for 2026 (VA DIC rates). The Special Survivor Indemnity Allowance that partly made up for the offset ended along with it.

If your death could be service-connected — for example, if you already have a VA disability rating — that makes SBP more valuable, because the two payments now stack. Our guide to VA benefits for surviving spouses covers DIC and the other programs a survivor may qualify for.

SBP vs. Life Insurance

The question every retiring family asks is whether to take SBP, buy life insurance instead, or combine them. Our term life vs. SBP comparison runs the numbers in detail; the short version:

Is SBP worth it?

A simple way to see the value: in the $3,000 example, the retiree pays $195 a month. If premiums run the full 30 years, that is $70,200 before any cost-of-living increases. The $1,650 monthly annuity pays that amount back in about three and a half years. If the surviving spouse lives 10 or 20 years longer than the retiree, the annuity pays several times what went in.

The risk runs the other way if your spouse dies first: the premiums already paid aren’t refunded, and coverage for that spouse simply ends. That is why the decision turns mostly on ages, health and how much other income your spouse would have.

When SBP tends to win

• Your health makes private insurance expensive or unavailable
• Your spouse is younger than you and could outlive you by decades
• Your spouse would rather have a predictable check than manage a large sum
• Your death could be service-connected, so SBP and DIC would both be paid

When life insurance may make more sense

• You are young and healthy enough to lock in low term rates
• Your spouse has substantial income or retirement savings of their own
• Your spouse is older than you, making it likely they die first
• You need a lump sum for a mortgage or college costs

Many families do both: SBP for income that can’t run out, and term insurance for the years when debts and children’s expenses are highest. If you already carry coverage through SGLI or VGLI, our life insurance guide for veterans explains the conversion rules and private options.

Reserve Component SBP (RCSBP)

Guard and Reserve members usually start drawing retired pay at 60, years after they qualify. The Reserve Component Survivor Benefit Plan covers that gap. When you receive your 20-year letter you have 90 days to choose one of three options:

• Option A (decline for now): no coverage until you start retired pay, when you can elect regular SBP
• Option B (deferred annuity): if you die before 60, your beneficiary’s annuity starts on the date you would have turned 60
• Option C (immediate annuity): if you die before 60, your beneficiary’s annuity starts right away

If you make no election within 90 days, the default is Option C. Choosing A or B requires your spouse’s signature on a notarized DD Form 2656-5. Options B and C cost more than regular SBP because they include coverage during the years before retired pay starts.

Making Your SBP Election

Active-duty retirees make the election on DD Form 2656, Data for Payment of Retired Personnel, as part of the retirement packet. Five points matter most:

• Doing nothing means full coverage. If you’re married or have a dependent child and don’t make a valid election, you get full spouse and child coverage.
• Your spouse must agree to anything less. Declining coverage, choosing a reduced base amount, or covering only children requires your spouse’s written, notarized consent on DD Form 2656-1.
• Consent can be waived only in narrow cases. The service can approve an election without the spouse’s signature only in limited situations, such as when the spouse’s whereabouts can’t be determined.
• Choose the base amount deliberately. It can be anywhere from $300 to your full retired pay; the annuity is always 55% of it.
• Get a briefing. Your installation’s retirement services officer can walk through the cost and payout for your exact retired pay.

Can You Change or Stop SBP Later?

SBP elections are designed to be permanent, with a handful of exceptions:

• One-year window after two years. You can stop participating during the one-year period that begins on the second anniversary of your first retired-pay payment, with your spouse’s written consent (10 U.S.C. 1448a). Coverage ends the first of the following month.
• Marriage after retirement. You can elect coverage for a new spouse within one year of the marriage.
• Divorce. You can elect former-spouse coverage within one year of the divorce, and a court can order it. If a court orders coverage, the former spouse can also make the election on their own within one year of the order.
• Loss of a beneficiary. If your covered spouse dies, premiums stop once DFAS is notified. Premiums already paid are not refunded.
• Open seasons. Congress occasionally authorizes an open season that lets retirees add or increase coverage. These are rare and announced by DFAS.

How Survivors Claim SBP

When a retiree dies, the family or the beneficiary should report the death to DFAS as soon as possible, online through askDFAS or by phone at 800-321-1080, Monday through Friday, 8:30 a.m. to 4:30 p.m. Eastern (DFAS). DFAS will ask for a death certificate and the beneficiary’s information, then start the annuity. Any retired pay paid after the date of death has to be returned, so prompt reporting avoids a debt.

Retired pay due but unpaid at death (arrears of pay) is separate from SBP and goes to whoever the retiree designated for it. If the death may be service-connected, apply to VA for DIC at the same time. Our DIC guide explains eligibility and the 2026 rates.

Frequently Asked Questions

This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the Department of Defense, DFAS, VA or any government agency. SBP elections are hard to reverse; confirm your figures with your retirement services officer or DFAS before you decide.