Most people will agree that insurance is
important. Hence, it’s somewhat ironic that many of us may not even
know all the insurance policies that we currently have. From
policies bought since young by our parents, to group insurance
plans that our employers have signed us up for,
to MediShield Life – a compulsory national basic health
insurance plan that all Singaporeans and PRs have.
It’s always beneficial to be aware of the insurance
policies that we have, even if we were not the ones who have bought
them.
Read Also: 6
Insurance Policies You May Already Have Without
Knowing
One insurance policy that many Singaporeans and PRs may
overlook is the Dependants’ Protection Scheme (DPS). The DPS is an
opt-out term life insurance policy that provides all eligible CPF
members with a sum assured of $46,000.
According to the CPF website, you will be
automatically included as long as you meet the following
criteria.
How Much Premiums Do You Pay For Coverage?
Annual premium for the DPS is dependent on your age.
Naturally the older you are, the higher your premium will be.
Source: CPF
Aside from its affordability, the best part about the
DPS is that you can use your CPF Ordinary Account (OA), or CPF
Special Account (SA) to pay for your annual premiums.
Apart from the Home Protection Scheme (HPS), the DPS is
the only other life insurance plan in Singapore that allows you to
use your CPF monies to pay your insurance premiums.
Hence, it makes
sense NOT to opt out from it, since you are essentially
getting useful life insurance without having to fork out any cash
on hand.
One misconception to avoid is thinking that since the
government already introduced some form of term life insurance, CPF
members no longer need to worry about their own life insurance
coverage. This is untrue.
At a sum assured of only $46,000, there is a strong
likelihood that most people will still need additional coverage.
Hence, it’s advisable that CPF members look at the Dependents’
Protection Scheme (DPS) as a form of supplementary life insurance
coverage.
While DPS coverage is automatically renewed each year
through deduction of premiums from your CPF account, it’s worth
pointing out that in some instances, CPF members may find their
coverage lapsing unknowingly.
This tends to happen if you have worked in a job that
pays you CPF contributions in your younger days for a short period
of time. For example, if you took on a one-month part-time job
while waiting to enlist in National Service, and was paid $600 for
your efforts for the month, you would have received a contribution
of about $136 into your CPF account. When you turn 21, you will
automatically be covered under the DPS, with an annual premium of
$36 deducted from your CPF.
However, your CPF funds will only be sufficient to pay
the annual premium of the DPS for three years. If you are not
already working by 24, which apply to many Singaporean male who
served national service and may still be in school, then your DPS
coverage will lapse unless you continue paying for the coverage
using cash. Do note that most Singaporeans, at this point in time,
may not even know they have the coverage in the first place at that
age.
To check if you are covered under the DPS, you can
check log in to the CPF website using your
SingPass.
The post Dependants Protection Scheme: Here’s One Insurance
Policy You Didn’t Know You Already Have appeared first
on DollarsAndSense.sg.
