No Wife, No Kids—Am I Eligible to Elect RC-SBP?
By Captain Samuel F. Wright, JAGC, USN (Ret.)
5.0—Military Service and Family Obligations
Q: I am a Lieutenant Colonel in the Army Reserve. I graduated from college and received my commission in 1990. I remained on active duty until 1998, then left active duty and affiliated with the Army Reserve. I have earned a “good year” each year. Earlier this year, I attained 20 good years, and I recently received my Notice of Eligibility (NOE) for Reserve Component retired pay at age 60.
Together with the NOE, I received paperwork about the Reserve Component Survivor Benefit Plan (RC-SBP). I have never been married, and I have no children (at least none of whom I am aware). Am I eligible to participate in the RC-SBP?
A: Yes. “A person who is not married and does not have a dependent child upon becoming eligible to participate in the Plan [RC-SBP] may elect to provide an annuity under the Plan to a natural person with an insurable interest in that person. In the case of a person providing a reserve-component annuity, such an election shall include a designation under subsection (e).” 10 U.S.C. 1448(b)(1)(A).
Q: What is a “natural person?” You lawyers always talk in gobbledygook. Is there such a thing as an “unnatural person?”
A: A natural person is a human being, as opposed to a corporation or other “legal person.”
Q: What is an “insurable interest?”
A: Black’s Law Dictionary defines “insurable interest” as follows: “In the case of life insurance, a reasonable expectation of pecuniary benefit from the continued life of another; also, a reasonable ground, either pecuniary or of blood or affinity, to expect some benefit or advantage from the continuance of the life of the assured.” Black’s Law Dictionary, Revised Fourth Edition, page 942.
Insurance must never be a mere wager. I do not have an insurable interest in your life because I have no reasonable expectation that I will receive a pecuniary benefit from you if you continue living. If I were to buy a life insurance policy on your life that would amount to a bet by me that you will die sooner rather than later. Such a bet is unlawful, and such a life insurance policy would be void as contrary to public policy. If I want to gamble, I need to go to Las Vegas and gamble on card games, not lives.
If you have parents or siblings living, you can choose them, or any one of them, as your RC-SBP beneficiary.
Q: I must make my RC-SBP election within 90 days after I receive my NOE. What happens if I later get married?
A: “A person who is not married and has no dependent child upon becoming eligible to participate in the Plan but who later marries or acquires a dependent child may elect to participate in the Plan.” 10 U.S.C. 1448(a)(5)(A).
“Such an election must be written, signed by the person making the election, and received by the Secretary concerned [Secretary of the Army for you] within one year after the person marries or acquires that dependent child.” 10 U.S.C. 1448(a)(5)(B).
If you marry, it is most important that you notify the Secretary of the Army and request enrollment in the RC-SBP within one year after the wedding. If you wait too long, you will lose the opportunity to enroll. I invite your attention to Law Review 1008, available at www.roa.org/law_review.
Q: Let us say that I elect RC-SBP coverage now and designate my sister as the beneficiary, and then I get married three years from now. At that point, will I be able to designate my new wife in lieu of my sister?