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SINGAPORE – Most members of the Central Provident Fund (CPF) under the Dependent Protection Scheme (DPS) will enjoy lower premiums for a higher insured sum of $ 70,000 as of April 1, 2021.
Currently, the sum insured is $ 46,000.
The lowest annual premiums include a reduction of $ 51 for members ages 45-49 and a reduction of $ 40 for members ages 50-54.
However, members ages 55 to 59 will pay a higher annual premium of $ 298 compared to $ 260.
When asked about the increase, a spokesperson for the CPF Board explained that the premium rate per $ 1,000 insured for members ages 55-59 had been reduced by 25 percent.
This was the most competitive tender offered by insurers, which determined that the premium for this age group would increase since the sum insured had increased significantly.
The maximum age of DPS coverage will also be increased to include members ages 60-65, but for a less insured sum of $ 55,000. Coverage will be limited to age 65.
Currently, DPS coverage is limited to age 60.
DPS is a term life insurance plan that gives insured members and their families a sum of money to get through the first few years after the insured dies or is terminally ill or permanently disabled.
It is automatically extended to CPF members who are working Singapore citizens or permanent residents between the ages of 21 and 60 when they make their first work contribution to CPF.
The group director (housing and investment group) on the CPF Board, Peh Er Yan, said: “DPS is intended to protect the member and their dependents during their working years. The highest sum insured of $ 70,000, which It is approximately three years of salary for a minor. The income member will provide greater financial support to the insured and their families in the event of a claim. This greater sum insured also comes with more attractive premiums than the current ones.
There were around 1.9 million CPF members with existing DPS coverage at the end of 2019.
Members ages 60-65 receive a lower insured sum because they likely have accumulated enough CPF savings or other savings that can be bequeathed to their dependents to help them cope for a reasonable period of time in the event of a claim, said a Spokesperson for the CPF Board. They are also more likely to have fewer dependents who depend on their income, he added.
On average, there is a reduction of about 47 percent of the premium per sum of thousand dollars insured.
These enhancements to DPS are part of an overhaul to better meet the needs of CPF members.
Great Eastern Life received a five-year contract to manage DPS beginning April 1, 2021.
Members age 60 and older but under 65, whose DPS coverage has ceased or will cease prior to April 1, 2021, can rejoin DPS by applying directly with Great Eastern Life when the new contract takes effect.
They will pay $ 298 for a guaranteed sum of $ 55,000.
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