COMMITMENT COMPETENCE CHARACTER

Military Survivor BenefitsAn Overview

Mission

• Provide quality life insurance as close to net cost as possible• Secure government benefits for veterans and their survivors• Educate military community on matters of financial security

• Nonprofit, VSO founded in 1879• Serving all uniformed services• Approved Educators

Quick Links and Critical Documents

Please visit our Website and Mobile Application for the Planning checklist, Survivor Checklist or personal Log (NMAA):

https://www.navymutual.org/https://www.navymutual.org/mission-educate/

Mobile App:

Agenda

Current BenefitsFuture Benefits

Survivor Benefit Plan

Insurance

Social Security

Veterans Affairs

Retirement Savings

YOU

SSA

DODVA

Survivors Monthly Income E6 O6

Dependency Indemnity Compensation (DIC) - Spouse $1,340 $1,340

Spouse Transition $286 $286

Children’s DIC $664 $332

Special Survivor Indemnity Allowance (SSIA) $323 $323

Survivor Benefit Plan (SBP) – Spouse (vs child only) $51 $3,365

Social Security (SS) $3,033 $4,204

TOTAL $5,697 $9,850

O6 - 29 years with spouse and one childE6 - 10 years with spouse and two young children

Active Duty Death-Survivor Benefit

$400,000

$100,000

$255

3 Years

1 Year

• SGLI

• Death Gratuity

• Social Security Lump Sum

• Medical/Dental Coverage

• Housing Allowance

• No Cost Final HHG Move

• Funeral/Burial Benefits

Death after service

$400,000

$100,000

$255

3 Years

1 Year

• SGLI

• Death Gratuity

• Social Security Lump Sum

• Medical/Dental Coverage

• Housing Allowance

• No Cost Final HHG Move

• Funeral/Burial Benefits up to 2K

If service-connected death, survivor may be eligible for additional benefits through the VA or DoD

Survivor Benefit Plan(SBP)

• Retirees only (not for separatees)• Calculator on free app – see YOUR cost/benefits

Cost• 6.5% of elected

amount• Deducted from retired

pay• Pre-tax

Benefit• 55% of elected amount• Max elected amount =

gross retired pay• COLA protected

Beneficiary Categories

Spouse only Spouse and Child(ren) Child(ren) only Person who has an Insurable Interest in me Former Spouse (see instructions) Former Spouse and Dependent Child(ren) from that marriage I elect not to participate in SBP

Spouse Coverage

• Spouse• Cost: 6.5%• Lifetime benefit: 55% of elected amount

• If you are married, spouse must concur if you:• elect child(ren) only coverage• elect less than full spouse coverage• decline SBP

Spouse and Child(ren) Cost

• Cost: 6.5% + child premiumExample: Retiree 40, Spouse 38, Youngest Child 10

SBP Elected/Base Amount = $1,000Cost: $65.00 + $0.56 = $65.56

• Benefit: 55%• Spouse is primary beneficiary• Divided equally among children if spouse becomes ineligible• Child eligibility ends at 18 (or 22 if enrolled in school full

time)• Disabled child eligible for life (if disability occurs while

eligible)

Child(ren) Cost Only

• Cost: based on your age and age of youngest eligible child• Single parent• Married couple (requires spouse concurrence)

Your Age Age of Youngest Child6 10 14 17

40 $2.50 $1.60 $0.90 $0.6045 $3.30 $2.10 $1.20 $0.7050 $5.70 $3.50 $2.90 $1.20

Example: Retiree 40, Youngest Child 10SBP Elected Base Amount = $1,000

Child Only Cost = $1.60

Former Spouse

• Former Spouse / Former Spouse and Child• Decree may determine member election

• Cost and benefit: same as for Spouse/Spouse and Child

• DD2656-1 (SBP Statement for Former Spouse Coverage)

SBP Premiums

• Pay for 30 years (360 payments) AND until age 70

• Stop paying premiums when no eligible beneficiary

• Decision revocable

• Can terminate between 2nd-3rd year after retirement

• Permanent decision; requires spouse’s notarizedconsent

• No refund to retiree

SBP Considerations

• Life expectancy

• Spouse income

• Assets: Savings; Investments; Insurance

• Inheritance

• Partial continuation of retired pay

• COLA protected

Reserve Component(RCSBP)

• Option A: Decline Participation• Can join prior to starting retired pay, if desired

• Option B: Deferred Annuity• Starts upon receipt of first retirement payment

• Option C: Immediate Annuity• Default if no election after 90 days

(referred to as the “20-year letter”*)

* Sent 90 days before reaching retirement eligibility

Comparison

Pre-tax premiums Benefits taxable COLA Lifetime of beneficiary Beneficiaries fixed Age, health, lifestyle NOT considered

After tax premiums Benefits tax free No COLA Fixed $ amount Beneficiaries may change anytime Age, health, lifestyle ARE factored

SBP

Life Insurance

Life Insurance Considerations

• How much do you need?

• SGLI and FSGLI are term insurance

• Ending 120 days from separation/retirement

• Comparison shop

<1% of term policies pay out

Veterans Group Life Insurance(VGLI)

• Maximum coverage $400,000 – as with SGLI

• Available in increments of $10,000

• Premiums increase at 5-year intervals

• Convertible to permanent commercial policy

• Accelerated death benefit option

• No proof of medical insurability required

• Up to 240 days to elect

VGLI Premiums(based on $400,000 maximum coverage)

$32$40$52$68$88

$144$268

$432$600

$920$1,840

$200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800$0<30

303540455055606570

75+

Age Monthly Premium

VGLI vs Commercial Term

$100

$0

$200

$400

$300

$500

$600

$700

45 50 60 6555Age

$400K Level Term Life insurance: Non-smoker

Level Term VGLI

$37K Savings

Social Security Benefits

• Survivor Benefits:• Spouse if caring for children under age 16• Children until age 18 and through high school• Spouse age 60 (reduced amount)

• Disability Benefits:• Benefit is percentage of PIA

• Retirement Benefits:• Earliest claim at 62: reduced % of PIA• Full SS age (67)• Age 70+

• Benefits are derived from your Primary Insurance Amount (PIA)

Funding Your NEXT Retirement

• Savings

• Investments

• Individual Retirement Accounts (IRAs)

• Roth vs. Traditional

• Employer sponsored plans

• 401(k)-type plans

• Thrift Savings Plan (TSP)

Thrift Savings Plan (Leaving the Service)

• Do Nothing

• Roll Over

• Withdraw

Closing Remarks

• All benefits discussed today must be applied for

• NONE are automatic

• Know what your survivors are entitled to

• You earned it!

NavyMutual.org/mission-educate/education@navymutual.org

Direct Education & Veteran Services Line - (888)298-4442