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RCSBP Benefit Cost
RCSBP members pay the standard SBP cost, plus an additional Reserve Component (RC) cost, through deductions from retired pay. This RC cost is often referred to as the “RCSBP add-on cost.”
The premium increases with retired pay cost-of-living adjustments.
How add-on cost is calculated
The Office of the Department of Defense Actuary provides the tables used to calculate RCSBP premiums. The tables reflect military death rates, remarriage and divorce rates, and other estimates.
The add-on premium depends on three things:
• type of beneficiary you elect
• annuity type you elect: immediate or deferred
• age difference between you and your spouse or former spouse
Continued payments after terminating NIP coverage
If you voluntarily terminate coverage for a natural interest person (NIP) with an insurable interest (not a former spouse) you will pay the add-on premium for your lifetime. If you terminate the coverage before age 60, the add-on premium is pro-rated.
When payments begin
If you have eligible beneficiaries, your RCSBP premium begins on the first day of the month after you meet the age and service requirements for non-regular retirement. If you meet the age and service requirements on the first day of the month, then the premium is effective that month.
If you choose to delay your retirement date or if you delay application for retirement, the premium is retroactive to the first day of the month after you meet the age and service requirements for non-regular retirement.
There is an exception for a child beneficiary. If you elected child-only coverage, the add-on portion of the RCSBP premium begins on the first day of the month after you meet the age and service requirements, regardless of whether any child is currently an eligible beneficiary.
Death before age 60
If you die before meeting age and service requirements, the add-on premium for the pre-age 60 coverage begins with the immediate or deferred annuity as a reduction of that annuity.
In some instances, you can change the type of coverage before premiums begin. The initial premium for election changes is effective on the first day of the month after you meet age and service requirements (or, if the member meets age and service requirements on the first day of the month, the premium is effective that month).