Here are the available election types:. Children are eligible to continue receiving payments until the end of the school year during which they turn 22, as long as they remain unmarried and attend one of the following full time:.
The certification process has gotten easier for students age 18 and older covered as a child annuitant under the military Survivor Benefit Plan. SBP annuity payments for qualifying high school and college students are not affected by school closures in the wake of coronavirus disease The Defense Finance and Accounting Service details the new certification process on their website, including all the changes.
If married at the time of retirement, spousal consent or a court order is required to elect less than maximum coverage. However, that reduction was phased out over several years, and fully eliminated as of April 1, So how do you calculate the base amount necessary to provide sufficient coverage?
This takes a little math. Pursuant to 10 U. When child coverage is added to former spouse coverage, only children resulting from the marriage to that former spouse are covered, including natural born, adopted, or stepchildren.
The additional premium for the children's portion, a fairly nominal amount as low as a few dollars a month , is calculated based upon the ages of the servicemember, the former spouse, and the youngest child.
Previously, the law was ambiguous, but DFAS had taken the position that if the former spouse died first, SBP coverage simply expired, and with it, all of the thousands of dollars in accumulated premium payments. If divorced, the form has a place to select former spouse coverage, but the former spouse's signature is not required for this form. To convert an existing SBP spouse coverage election into former spouse coverage, the retiree and former spouse must complete a DD Form , Survivor Benefit Plan SBP Election Statement for Former Spouse Coverage , and indicate whether the election is being made pursuant to a court order, a written agreement, or voluntarily.
This distinction is significant, as it affects whether the retiree can unilaterally change the former spouse coverage. The DD Form to convert the coverage from spouse to former spouse must be submitted within one year of the court order requiring coverage! A needless-sounding bit of bureaucracy, but an important one - unless this is done, the former spouse will not be covered. 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. Talk to a financial advisor for more information.
If you have more than one former spouse, you can only choose one. If you add a former spouse, your current spouse doesn't get anything. If you don't have a spouse or kids you can elect SBP coverage for a person with a natural insurable interest in the member. This usually includes business partners. The Department of Defense defines a natural insurable interest as "a natural person with an insurable interest who has a reasonable and lawful expectation of financial benefit from the continued life of the participating member, or any individual having a reasonable and lawful basis, founded upon the relation of parties to each other, either financial or of blood or affinity, to expect some benefit or advantage from the continuance of the life of the retired member.
Like your retirement pay the SBP annuity is protected from inflation. Military benefits are always changing. Keep up with everything from pay to health care by subscribing to Military. Not everyone retiring from military service needs a life annuity for a survivor. Some people will retire from military service and not be financially dependent on their pension.
Some will. Some will have a short period of dependence, but then grow independent of it later. We believe there is generally good value in SBP, but if you are able to meet your needs with a less expensive product like a term life insurance policy , you should take the less expensive product. When analyzing your need for SBP you should assess such factors as:. Kate Horrell has a comprehensive list of SBP-related points to ponder over on her website.
The nightmare scenario for SBP is that the retiree pays for SBP for 30 years and the day after the final payment is made the survivor falls over dead and never collects a dime of survivor benefits. The answer to the breakeven question is 42 months. If you paid for SBP for the full 30 years of premiums at 6. If you are considering a variation of SBP that changes the survivor or the base amount you may get different results.
Most families will find that SBP is not a good solution for survivors other than the spouse, but some will. Perhaps there is a child with special needs who will rely on that pension income long after the retiree has passed.
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