I retired a year ago from active duty. I won't try to compare SBP with term insurance...it isn't exactly the same. Some points to consider: SBP is before taxes, so your income reduction is actually less than $270. Somewhere closer to $200, if I remember. Also, SBP increases with inflation, so you would also have to factor that in when comparing to term insurance.

I retired w/23 years (O-5) and chose a third option--SBP allows you to contribute a significantly lesser amount to cover your kids until they reach 22 years of age. Same amount gets paid (55%) but ends when your youngest child reaches 22. My wife works a full time job, has an MBA, so would not be dependent on my retirement. My SBP is there to cover her until our kids are out of college--all I was really concerned about.

If you have kids, this is something definitely worth asking about. They don't push that option very much, but it is in the contract.