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LAW REVIEW 1069
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?
A: Yes.
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