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SBP and Long-Term Care Insurance

Military Pay and Benefits Estate Planning Retirement Funding

I'm generally a fan of the Survivor's Benefit Program (SBP). You can read about why here. But beyond income protection, SBP coverage can affect your surviving spouse's access to the government's Federal Long-Term Care Insurance program (FLTCIP).

Important Insurance Coverage Available to Active and Retired Military Officers

The FLTCIP is available to active and retired military members as well as civil servants. The insurance provides coverage for you when you no longer can take care of yourself and need assistance with things like bathing or getting out of bed. I won't go into the specifics of the program. I'll cover that in a future post. But if you want, you can think of it as "nursing home" insurance. The insurance will provide a set dollar amount for a certain period to pay for the help you need. There is a pretty good chance that at some point you will need some assistance, so it is at least worth considering.

One of the benefits of the FLTCIP is that prices are gender neutral. Most commercially available policies price based on gender and women pay more than men (they are more likely to use the insurance). So, if your spouse is female access to the FLTCIP could be a good thing.

Access to the FLTCIP is Not Guaranteed After Retirement

In order to have access to the FLTCIP the covered individual needs to be on active duty or married to someone who is or be an annuitant or married to someone who is. So, while on active duty your spouse will have no issues obtaining long-term care insurance from the government. The same is true after you retire from the military. The problem occurs if you check off the planet and didn't elect the SBP when you retired. If you have selected the SBP, then your surviving spouse will be considered an annuitant and will have access to the FLTCIP. If you didn't select the SBP, then your surviving spouse is not considered an annuitant and will not have access to the FLTCIP. And again, if your spouse is female there is a pretty good chance that the price she pays for long-term care insurance will be based on her gender and potentially more expensive than the same coverage she could have obtained through the FTLCIP.

What Should You Do?

If you've already retired from the military and didn't elect SBP, then strongly consider the FLTCIP for you and/or your spouse while you are still alive. If you did take SBP, then the need isn't quite as urgent. But remember, there is no guarantee that you or your spouse will remain insurable.

If you're approaching retirement from the military, then add access to the FLTCIP as another factor in your decision process concerning electing SBP or not.

Integrating Military Benefits Into Your Financial Plan isn't Easy

There are a lot of things to consider when developing a plan for your financial future. Make sure you consider all your military and veteran's benefits and how they interact when you make your financial plans or work with someone who does.


If you liked this article, you might enjoy the following blog posts

SBP and DIC


4 Steps military officers Should take when inheriting an IRA


Military Finances 101: The Insurance Triangle



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