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Occasional Contributor
Recently I've found more and more retirees coming to me for advice on the government's SBP plan. There are too many questions left unanswered and the government doesn't offer any alternatives. There are better alternatives than giving the government an additional 6.5% of your income during retirement years. Contact me today knightenventures@yahoo.com.

12 REPLIES

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Hi shipmate,

My advice is to take the amount of money the spouse will receive, and then shop for the cheapest life insurance policy that will meet that amount. If you can find one, buy it. Otherwise, relax, and pay your SBP payments.

 

Check out www.Elks4vets.org for more info.

 

Syd N.

(360) 649-0392

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Please correct me if I'm wrong, I know that rules change, but isn't SBP required in order for the spouse to maintain Tricare coverage? Seems short-sighted to prevent the spouse from receiving medical benefits in order to receive a slightly less expensive annuity.

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The cheapest life insurance comes from the cheapest company. And the policy is not the same when from a cheaper company, it's backed by a weaker promise. General Custer was with the best. And they are still the best today.
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Correction. One has nothing to do with the other. It has never been a rule. In the briefings given to us by the military we are shown a PowerPoint detailing all the upsides to the plan. It is sold to us. If we decide not to have it they gov says "ph you dont love ypur family?" Because it is simple for us to understand. My retirement pay $6000/month. SBP=$390/month or $4680/year. Pay that for 20 years then have your wife divorce you. You burn $93,600. Or put it in a better place, you're choice.
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And if you think divorce or your wife predeceasing you is impossible. Then SBP is just the plan for you. :-)
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Just curious. It dows apply to my husband and me since we're both eligible for Tricare. I had heard this years ago but of course know better than to believe everything I read/hear. One reason we took SBP is because life insurance would have been far higher than what we pay for my husband and he isnt SC. Thanks!
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1. I mentioned the cheap insurance to prove a point that sbp was a better deal than civilian insurance policies.
2. I've been divorced, and I'm still paying my sbp because it will go to my present wife. And, when I've paid a required number of months, it will be paid off. Sbp is like everything else financial, you have to do your homework, make your best decision initially, then monitor the item and be ready to chance your tack if it doesn't behave as you desired. There are People you can contact that will help you make that decision. I'm one of them, and I don't make a cent when I do it. I just like to help. You are not alone!!
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If your husband pays on SBP for thirty years and then you die. He loses every single dollar he ever placed into it. If he pays for SBP for ten years and you die, he loses every single dollar he put into it. If his money goes into whole life, any of the following becomes an option to him. You die, he takes the cash. He does, you get the cash. You both live, you both take the cash. You both live a long life, die a mature death, and you leave a 100% tax free legacy to your posterity. It is a self completing plan. The only plan in which the retiree has all the control over assets him/herself.
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It may "cost" more up front. But what can you afford more, $100/month now. Or waiting twenty years, your wife/husband leaving you/dieing and you realizing you paid $100,000+ for "peace of mind." No thank you mam. I'll take the financial advisor putting me in the correct plan for spouse, kids, grand kids. The he k with the government netting 6.5% annual off me.