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Friday, October 02, 2020 – 1:02 PM
Starting next April, members of the Central Provident Fund (CPF) under the Dependent Protection Scheme (DPS) will obtain a higher insured sum of S $ 70,000, compared to S $ 46,000 with “more attractive premiums,” he said. the CPF Board in a press release Friday.
The maximum age of coverage will also be increased from the current limit of 60 to cover members up to age 65, while the sum insured for this group will be S $ 55,000.
DPS is a term life insurance plan that provides policyholders and their families with a sum of money to spend the first few years in the event that the policyholders die or suffer a terminal illness or total permanent disability.
According to the CPF Board, there were approximately 1.9 million members with existing DPS coverage at the end of 2019.
Peh Er Yan, CPF Board Housing and Investment Group Director, said: “DPS is intended to protect the member and their dependents during their working years. The highest sum insured of S $ 70,000, which is approximately three years of salary for a minor -income member, will provide greater financial support to the insured and their families in the event of a claim.
Under the improved scheme, premiums will be mostly cheaper than current rates, except for those 55 and older. On average, there is a reduction of about 47 percent for the $ 1,000 insured premium, the board said.
In explaining why the sum insured for older members is less, the CPF Board noted that members of this age group are likely to have accumulated sufficient CPF savings or other savings that can be bequeathed to their dependents to help them take advantage for a reasonable period of time in the event of a claim. They are also more likely to have fewer dependents that depend on their income, with children who have reached adulthood.
“This strikes a balance between the member’s need for financial protection and keeping more of their CPF for higher retirement payments,” the statutory board said, adding that the improvements to the DPS are part of a review to better meet the needs of the members of the CPF.
The CPF Board awarded Great Eastern Life a five-year contract to manage the DPS beginning April 1, 2021. Great Eastern was chosen through a bidding process, and the insurer offered the most attractive premiums to members, he noted. board.
In a separate press release on Friday, Khor Hock Seng, CEO of the Great Eastern group, said: “We believe that insurance should be affordable and easily accessible to all … DPS members will have access to our full suite of services, insurance solutions and mobile applications “.
No action is required for members with active DPS coverage in April of next year, where their DPS coverage will continue to automatically renew annually before their 65th birthday, the statutory board said.
Members insured by NTUC Income will move to Great Eastern Life when the latter assumes sole administration of DPS. Policyholders under NTUC Income will need to make a new DPS nomination.
Additionally, members 60 and older but under 65 who wish to rejoin DPS can do so by applying directly to Great Eastern when the new contract takes effect, the CPF Board said.
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