Martin Lee @ Sg
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Dependent Protection Scheme

The Dependent Protection Scheme (DPS) is a term insurance scheme under CPF. Under the DPS, a lump sum payment will be paid out if the insured member passes away or becomes permanently incapacitated such that he or she can no longer work.

Currently, DPS is administered by two insurers, Great Eastern Life and NTUC Income. The scheme is extended to CPF members who are Singapore citizens or Permanent Residents, between age 16 and 60, when they make their first CPF contribution.

DPS covers CPF members for a maximum sum assured of $46,000 up to age 60 worldwide. Premiums varies depending on the age band (starting from $36 per year) and is deducted from the Ordinary Account (OA).

As the scheme is optional, members can always opt out of the scheme.

I think the scheme is good as it helps provide a (small) safety net for those people who don’t see the need for insurance. The people who fail to plan to make sure their family is adequately covered are also usually the same people who will not bother to opt-out of such schemes.

A few days ago, there were a couple of letters to the ST Forum (one by a parent and one by a student) requesting for a review of the automatic inclusion scheme.

I’m not so sure what is there to review as the system is already optional in the first place.

Even if a person’s OA (and SA) is depleted and needs to pay in cash, $36/year is not a huge amount and is a worthwhile price to pay to get some basic coverage (Just drink one less bubble tea per month?). And if you really do not want to pay cash, no one can force you and the policy will simply lapse.

If anything, this kind of basic coverage should be made compulsory and extended to all Singapore citizens. For those who are really poor, the country can pay for the premiums.

Here’s a short video on DPS.

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