Dependency and Indemnity Compensation is a benefit paid to survivors of servicemembers who die while on active duty, or veterans who die of a service-connected condition. It provides monthly cash payments.DIC payments are non-taxable.here are two benefits that provide financial support to survivors of military personnel who die as a result of their military service: Survivor Benefit Plan (SBP) and Dependency and Indemnity Compensation (DIC).