Posted on Jul 13, 2015
What is your opinion of the DoD Survivor Benefit Plan? Do you see it as an annuity or life insurance? Would you recommend this benefit?
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Upon my retirement in 2013, I felt excited and happy for the new adventure that I was about to start; however, at the same time I felt extremely overwhelmed and at times dumb. Dumb to the information that was being provided to me, such as the survivor benefit plan. I will admit that the instructor tried to explain it; however, the understanding that I had has never sat that well with me or even my wife. I understand that between the 25th months through the 36th month is the only time that I will be allowed to cancel this plan, and there is rarely an open season enrollment option available.
What is your opinion, if any, on the survivor benefit plan?
Are there better options in the civilian sector to buy into that will provide your beneficiary with the monthly payments?
What is your opinion, if any, on the survivor benefit plan?
Are there better options in the civilian sector to buy into that will provide your beneficiary with the monthly payments?
Transition
Benefits
Retirement
Insurance
Investing
Posted 9 y ago
Responses: 32
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My opinion is that the SBP is too expensive. You can spend half as much to purchase a term insurance policy that will pay your spouse a lump sum that he/she can invest. If invested wisely, such a nest egg could provide him/her a lifetime monthly income equal to or greater than the SBP. This assumes that you've also ensured you're debt free or have enough insurance to cover both debts (e.g. mortgage) and the necessary lump sum for investment purposes.
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I see it as annuity for my wife who has stood by and supported me for much of my military career and all of my VA disability time. Unfortunately since Congress has not backdated mobilization credit to reduce retirement age by each period of 90 days of creditable mobilization going back to 9/11/2001, I will probably have to wait until October 2016 to activate my survivor benefit plan (SBP). As far as I know the survivor benefit plan has no reserves and like social security is based on Congress approving and appropriating funds to sustain them each year. I am hopeful that SBP will be solvent throughout my wife's life and beyond for all serving service members spouses to benefit from.
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