Posted on Dec 15, 2022
Why You Should Factor the New SBP-DIC Rule Into Your Financial Plans
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Certain military retirees who are rated 100% disabled by the VA may have the option to terminate their Survivor Benefit Plan coverage. This may seem like a logical choice in situations where it is likely that survivors will receive Dependency and Indemnity Compensation.
However, there are several factors to consider to ensure that survivors will still have adequate income if the retiree predeceases them. If you are considering opting out of SBP based on disability, don’t forget that the rules about SBP and DIC have changed. The new rules, which will allow a survivor to receive full SBP and DIC payments, will be completely phased in on Jan. 1, 2023. Families who considered discontinuing SBP coverage in the past may think differently now that survivors can receive the full amount of both benefits.
However, there are several factors to consider to ensure that survivors will still have adequate income if the retiree predeceases them. If you are considering opting out of SBP based on disability, don’t forget that the rules about SBP and DIC have changed. The new rules, which will allow a survivor to receive full SBP and DIC payments, will be completely phased in on Jan. 1, 2023. Families who considered discontinuing SBP coverage in the past may think differently now that survivors can receive the full amount of both benefits.
Why You Should Factor the New SBP-DIC Rule Into Your Financial Plans
Posted from moaa.org
Disability
Insurance
Veterans Affairs (VA)
Money
Edited 2 y ago
Posted 2 y ago
Responses: 3
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I talked my SBP and an option in my second retirement that would grant her continued income should I pass before her and let her decide which options gave her greater peace of mind for her future.
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Absolutely Charlie. Very few people would benefit from terminating SBP now that DIC is considered "also paid".
If you're eligible to do so and are leaning towards saving the monthly SBP, for the sake of those you leave behind, make sure you do a hard look at your reasons to do it and what you'll be giving up. If you're still inclined to do so, take another hard look before doing anything.
If you're eligible to do so and are leaning towards saving the monthly SBP, for the sake of those you leave behind, make sure you do a hard look at your reasons to do it and what you'll be giving up. If you're still inclined to do so, take another hard look before doing anything.
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