If you retire from the military, your retired pay stops the day you die. The Survivor Benefit Plan (SBP) is the Department of Defense program that converts part of that pay into a lifetime monthly income for the people who depend on you. This guide explains what SBP is, how the election works, what the premiums are in general terms, and the 2023 change that lets SBP and a VA survivor benefit stack for the first time. This is DoD territory, separate from VA benefits, so we point you to the right agency for each piece.
What SBP is
In the words of Military OneSource: "Military retired pay stops upon the death of the retiree. The Survivor Benefit Plan allows a retiree to ensure, after death, a continuous lifetime annuity for their dependents. The annuity, based on a percentage of retired pay, pays eligible survivors an inflation-adjusted monthly income."
Two ideas to hold onto: the annuity is a percentage of retired pay, and it is inflation-adjusted, so it keeps pace over a long retirement.
The election happens at retirement
SBP is decided when you retire, and the default leans toward coverage. Military OneSource: "At retirement, full basic SBP for a spouses [sic] and children is automatic if no other valid election is made. You may not reduce or decline spouse coverage without your spouse's written consent. If you have a former spouse, it may affect your options."
That spousal-consent rule is important. Your spouse has a say in the decision by law.
The election is hard to undo. In the source's words: "SBP elections cannot be canceled or changed after retirement except in specific instances such as a change in marital status or after the loss of a beneficiary." So this is a decision to make carefully at the retirement table, not one to defer and freely revisit later.
What SBP costs, in general terms
You pay premiums for the coverage. Because the exact premium percentage is not stated on the source page this guide relies on, we describe the cost qualitatively rather than quote a number we cannot verify here. Military OneSource: "A military retiree pays premiums for SBP coverage upon retiring. Premiums are paid from gross retired pay, so they don't count as income. This means less tax and less out-of-pocket costs for SBP. The premiums are partially funded by the government and the costs of operating the program are absorbed by the government, so the average premiums are well below the cost for a conventional insurance policy."
Two practical takeaways: premiums come out of gross retired pay, which lowers taxable income, and the government subsidizes the program, so the cost is generally below a comparable private policy. For the exact premium percentage that applies to your elected base amount, ask DFAS or check the DoD Financial Management Regulation, because this guide does not state a figure it cannot source.
The 2023 change: SBP and DIC now stack
For years, survivors lost SBP dollar-for-dollar against a VA benefit called Dependency and Indemnity Compensation (DIC). That is over. Here is the DIC definition first, in the source's words: "Dependency and Indemnity Compensation is a monetary benefit offered by the Veterans Affairs to survivors of service members and retirees whose death results from a service-related injury or disease." Our DIC survivor benefits guide covers that VA benefit in depth.
Now the change. Military OneSource: "Prior to 2023, spouse SBP annuitants, except for those who remarried after age 55 (or in other specific circumstances), could not receive full SBP and DIC payments at the same time. Their SBP payment was reduced by all or part of their DIC payment. Beginning on Feb. 1, 2023, surviving spouses receive their full SBP payment from the Defense Finance and Accounting Service and their full DIC payment from the VA."
That sentence is about when payments are received. The entitlement date is set by statute, and it is the one to count from: under 10 U.S.C. 1450(c)(1)(D), the annuity payable is "On and after January 1, 2023, the full amount of the annuity under this section." So on and after January 1, 2023, the full SBP annuity is payable alongside DIC. The old offset is gone.
One related program wound down with the offset. Military OneSource: "As the SBPO-DIC [sic] no longer exists, SSIA will no longer be paid after the Jan. 3, 2023." SSIA was the Special Survivor Indemnity Allowance, paid to spouses whose SBP was subject to the offset; with the offset gone, it ended.
SBP and DIC at a glance
| Feature | SBP | DIC |
|---|---|---|
| Who pays it | Defense Finance and Accounting Service (DFAS) | Department of Veterans Affairs (VA) |
| What it is based on | A percentage of military retired pay | A VA survivor benefit tied to a service-connected death |
| Can they be received together | Yes, in full, on and after January 1, 2023 | Yes, in full, on and after January 1, 2023 |
How a survivor starts payments
When a retiree dies, someone has to tell DFAS. Military OneSource: "To receive SBP benefits, a beneficiary needs to contact DFAS to report the death. For retirees, beneficiaries can report the death using DFAS' AskDFAS Report a Retiree's Death online or call the DFAS Customer Care Center at 800-321-1080."
Because SBP and DIC come from two different agencies, a survivor generally deals with DFAS for the SBP annuity and the VA for DIC. Our guide on what happens to VA benefits when a veteran dies walks the VA side, and our guide comparing VGLI and VALife covers the life-insurance piece of survivor income.
What this does not mean
SBP is not the same as VA life insurance, and it is not the same as DIC. SBP is a DoD annuity funded from retired pay and paid by DFAS; DIC is a VA benefit; life insurance like VGLI or VALife is separate again. The 2023 change means SBP and DIC no longer offset each other, but it does not merge them into one payment and it does not change which agency runs each program. And because the exact SBP premium percentage is not stated on the source page used here, do not treat any specific cost figure you see elsewhere as confirmed by this guide; verify it with DFAS for your own base amount.
Hypothetical example. A retiree we will call Tom elected full spouse SBP at his retirement, with his spouse's written consent. Years later he dies of a service-connected condition. His surviving spouse, Dana, contacts DFAS to report the death and, separately, files with the VA for DIC. Because the death is service-connected, Dana qualifies for DIC, and because it is after January 1, 2023, she receives her full SBP annuity from DFAS and her full DIC payment from the VA, with no offset between them. This illustrates how the two agencies and the post-2023 rule fit together. It is not a promise about any real survivor's eligibility, which DFAS and the VA decide.
Where to go next
SBP is one piece of a survivor-income picture that also includes VA benefits. Start with our DIC survivor benefits guide and the hub on what happens to VA benefits when a veteran dies. To compare the two VA life-insurance doors, see the VGLI vs VALife guide. For retired-pay concepts that interact with disability pay, our CRDP vs CRSC guide helps. Look up any term in the glossary, and browse the range of programs on the VA benefits page. VeteranHQ explains these programs and helps you organize records. We do not enroll you in SBP or file survivor claims; those go to DFAS and the VA.