Spouse & Former Spouse Coverage

Retired servicemembers pay a monthly premium for SBP coverage.  The federal government subsidizes part of the program costs (theoretically 40%), and premiums are deducted from the military retirement before disbursal, so are not taxable.

The normal premium for participants is 6.5% of the designated base amount for a surviving spouse or former spouse.

Servicemembers who are retiring for disability, or who entered active duty before 2/28/1990, have another option for the SBP premium. They can utilize the lesser of the 6.5% formula, or 2.5% of the threshold amount ($675 as of January 1, 2008), plus 10% of the remainder of the designated base amount.  The threshold amount increases annually with the active duty COLA.

Example: assuming a designated base amount of $1600, the premium cost under each method would be:

1. $104 ($1600 x 0.065), or
2. $109.38 ($675 x 0.025, or $16.88, plus the remainder of $925 x 0.10, or $92.50)

Before you worry about which method to use, if you're eligible for the alternative premium calculation, DFAS will use it automatically if it results in a lower premium.

The premium is considered "paid up" once the servicemember has paid SBP premiums for 30 years (or 360 months), providing that the maximum SBP coverage was elected.  Click here for more information.

Children Coverage

As indicated previously, the premium for children coverage alone is usually a nominal few dollars, and as an add-on to spouse or former spouse coverage, it may be under a dollar.

More Information.

Premium Calculator, provided by the Air Force Personnel Center, which includes calculations of child coverage premium.

Office of the Secretary of Defense page on SBP has a lot of SBP information, including illustrations of how premium costs are calculated.

DFAS web site.  Has a FAQ and calculator on open season enrollment costs.