SBP Decision Worksheet — VUB Financial Readiness Course

Survivor Benefit Plan (SBP) Overview

Pays 55% of selected base amount to your designated beneficiary
Election made via DD Form 2656 at retirement
Decision is irrevocable — once elected, you cannot cancel
Declining SBP requires spouse's notarized signature
Monthly premium: 6.5% of selected base amount (deducted pre-tax)
Premiums are paid-up after 360 months (30 years) AND reaching age 70 — both conditions must be met

Advantages of SBP

Lifetime longevity insurance
No medical exam required
Government-subsidized program
Inflation-indexed (COLA adjustments)
Premiums paid pre-tax

Disadvantages of SBP

No access to principal
Lost if beneficiary predeceases you
May end on remarriage before age 55
Less flexible than private insurance
Irrevocable decision

Important: DIC Interaction

Dependency and Indemnity Compensation (DIC) is $1,612.74/month in 2026. If your survivor qualifies for both SBP and DIC, the SBP annuity is reduced dollar-for-dollar by the DIC amount. If DIC equals or exceeds SBP, SBP premiums paid are refunded to the survivor. Factor this into your decision.

My SBP Calculation

My selected base amount:

Monthly premium (× 6.5%):

Beneficiary would receive (× 55%): /mo

Total premiums if paid-up at 70:

Beneficiary Designation Checklist

SBP (DD Form 2656) SGLI / VGLI TSP (Form TSP-3) VA Life Insurance Bank accounts (TOD/POD) IRAs (primary + contingent)

Warning: Outdated beneficiaries after divorce or remarriage WILL receive benefits regardless of your will. Review and update all designations.

Estate Planning Essentials

Last Will & Testament Durable Power of Attorney Healthcare Power of Attorney Advance Directive / Living Will

Consult a qualified financial advisor for decisions specific to your situation.