Updated August 2, 2026. Quick answer: the Survivor Benefit Plan costs 6.5% of the base amount you elect and pays your surviving spouse 55% of it for life, rising with inflation. The premium comes out of retired pay before tax, so it costs less than the sticker. Whether term life beats it depends on facts no calculator can see — so this one prices both honestly and declines to declare a winner.
Both, on your numbers
What the statute actually says
The annuity is fixed by law at “55 percent of the base amount”, and for anyone who first served on or after 1 March 1990 the premium is “6 1/2 percent of the base amount”. Neither is negotiable and neither depends on your health, your age, or your spouse’s.
A historical note worth having, because it causes real confusion: the statute still contains a lower tier for a survivor aged 62 or over, which used to cut the annuity to 35%. It was phased out between 2005 and 2008, and the law now reads “For months after March 2008, the applicable percent is 55 percent.” If you were briefed on this a couple of decades ago, or read an old handout, the number you remember is no longer the number.
The premium stops. That is the part people miss.
SBP is not a bill for life. Premiums end at the later of 360 payments and age 70 — the statute says “after the later of … the 360th month … and … the month during which the participant attains 70 years of age.”
Both conditions, which produces a result people get backwards. Retire at 46 and you pay for 30 years, finishing at 76. Retire at 38 and the 30 years would end at 68, so age 70 binds instead and you pay for 32. Either way the coverage then continues, free, for the rest of your life. A term policy does the opposite: you stop paying because it ended.
The four asymmetries that decide it
| SBP | Term life | |
|---|---|---|
| Duration | As long as your spouse lives | Until the term ends, which is usually before you die |
| Inflation | Rises with retired pay COLAs | Fixed sum, losing value every year |
| Underwriting | None — health is irrelevant | Priced on your health, and can be declined |
| Tax | Premium pre-tax; annuity taxable | Premium after-tax; death benefit income-tax-free |
On the example above — $6,000 of retired pay, full base amount — the premium is $4,680 a year and buys $39,600 a year of inflation-linked income that does not stop. Term life can beat that on cost alone; it cannot match those four rows, and the comparison is dishonest if it pretends otherwise.
Where term genuinely wins
It is a real answer in real cases, and anyone who tells you SBP is always right is selling certainty rather than analysis. Term is stronger when your spouse has their own pension and their own income; when the need is temporary rather than lifelong — children to get through college, a mortgage to see off; when you are young and healthy enough to be priced well; or when your spouse is significantly older, which shortens the period the annuity would pay.
It is weaker than it looks when the term expires while your spouse still needs the money, which is the failure mode nobody plans for and everyone eventually meets.
Two rules that are not about money at all
Your spouse has to agree. Declining SBP, or electing less than the maximum, requires their written concurrence — the statute bars a married member from electing “not to participate in the Plan” or to provide “an annuity for the person’s spouse at less than the maximum level” without it. This is not a formality; it is a decision the law insists you make together.
The opt-out window is not when you think. It is almost universally described as a one-year window after retirement. The statute puts it “during the one-year period beginning on the second anniversary of the date on which payment of retired pay … commences” — months 25 to 36, not months 1 to 12. Someone acting on the common version will find the door either not yet open or already shut, and spousal concurrence is required then too.
Related
The civil-service equivalent runs on the same logic at different prices: the FERS survivor election costs 10% for 50%. In the private sector the same choice is priced by an insurer rather than by statute — single life against joint and survivor. And the arithmetic every widow meets regardless: what happens to the tax bill when one person dies.
Annuity from 10 U.S.C. § 1451(a)(1); premium from § 1452(a)(1)(A)(iii); the paid-up rule from § 1452(j); the withdrawal window from § 1448a; spousal concurrence from § 1448(a)(3)(A); tax treatment and the $300 base-amount floor from DoD FMR Volume 7B. Statutory text read on uscode.house.gov. Guard and Reserve coverage (RCSBP) is priced differently and is not modelled here. Read August 2026. General information, not advice, and not a benefits determination.
Military service changes two of these rules: prior active service can be bought into a FERS annuity for 3% of the pay you earned then — usually requiring you to waive military retired pay, though reserve retirees are excepted — and at 65 TRICARE requires Medicare Part B or it ends.
Getting advice on this decision. What to ask, and why an advisor should price the SBP election rather than declare it: financial advisor for military retirees.
If the comparison here comes out close, the next question is how much coverage the survivor actually needs rather than how much SBP would pay — the survivor-gap calculator starts from the shortfall, and it can return zero.