If your spouse is a member of the Armed Forces it is important for you both to understand the benefits available to you. When your spouse retires he will receive retirement pay; unfortunately, if he passes away that retirement income will cease. Some options are open to you, and your dependent children if you have them, to help provide some support once military retirement income is gone.
The Survivor Benefit Plan
If you are retired and pass away, the Survivor Benefit Plan offers coverage to your spouse and children for as little as $300 dollars per month based on the type of coverage you elect. If you choose full coverage it means your surviving spouse will receive 55% of your retirement pay. If you decide to choose lower coverage, your spouse will receive 55% of your elected base amount. As of October 1, 2008, retired participants who reach the age of 70 and have made 360 payments to the plan are considered paid in full. No additional monthly payments are required of you in order for your spouse to be paid benefits upon your death.
Because this coverage is so important, you will automatically be enrolled in the basic plan. It is up to you and your spouse to review all the coverage options and choose the one that is right for you and your budget. Written notice is required to opt out of this coverage.
Dependency and Indemnity Compensation
If you are the surviving spouse, with or without dependent children, of an active or retired veteran who died of service-connected causes, you and your children are eligible for the Dependency and Indemnity Compensation or DIC. As of December 1, 2008, the monthly payments total $1,154 dollars. This rate is adjusted for cost of living. If you have children under eighteen, each of them is also eligible to receive an additional $286 dollars per month. A monthly transitional payment of $286 is added to your benefit to help offset the cost of child raising.
Former Spouse Coverage
If you are a divorced retired service person, you can elect to cover your former spouse via the Survivor Benefit Plan. Upon your death, a former surviving spouse's coverage is not reduced when they reach age 62 and become Social Security eligible. You will be required to make monthly payments for the coverage based on the plan you choose.
There are a few caveats if you choose to cover a former spouse. If you have more than one former spouse, you must determine which will be covered; only one beneficiary in this category is allowed.
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