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CPF members to get higher sum assured, increased coverage for Dependants' Protection Scheme
FROM next April, Central Provident Fund (CPF) members under the Dependants' Protection Scheme (DPS) will get a higher sum assured of S$70,000, up from S$46,000 at "more attractive premiums", the CPF Board said in a press statement on Friday.
The maximum age of coverage will also be increased from the current cap of 60 to cover members up to age 65, while the sum assured for this group will be S$55,000.
DPS is a term-life insurance scheme that provides insured members and their families with a sum of money to get through the first few years should the insured members pass away, or suffer from terminal illness or total permanent disability.
According to CPF Board, there were about 1.9 million members with an existing DPS cover as at end-2019.
Peh Er Yan, CPF Board's group director of housing & investment group, said: "DPS is meant to protect the member and his dependants during his working years. The higher sum assured of S$70,000, which is approximately three years of salary for a lower-income member, will provide greater financial support for the insured members and their family members in the event of a claim."
Under the enhanced scheme, premiums will mostly be cheaper than the current rates, except for those age 55 and above. On average, there is a reduction of about 47 per cent for the premium per thousand-dollar sum assured, the board said.
In explaining why the sum assured for older members is lower, CPF Board noted that members in this age group are likely to have accumulated sufficient CPF savings or other savings that can be bequeathed to their dependants to help them tide over a reasonable period of time in the event of a claim. They are also more likely to have fewer dependants who are reliant on their income, with children who have reached adulthood.
"This strikes a balance between the member's need for financial protection and conserving more of their CPF for higher retirement payouts," the statutory board said, adding that the enhancements to DPS are part of a review to better meet the needs of CPF members.
CPF Board has awarded Great Eastern Life a five-year contract to administer the DPS starting from April 1, 2021. Great Eastern was picked through a tender process, with the insurer offering the most attractive premiums for members, the board noted.
In a separate press statement on Friday, Khor Hock Seng, Great Eastern's group chief executive officer, said: "We believe insurance should be made 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 an active DPS cover as at April next year, where their DPS covers will continue to be automatically renewed annually before their 65th birthday, the statutory board said.
Members insured under NTUC Income will be moved to Great Eastern Life when the latter takes over the sole administration of DPS. Those insured under NTUC Income will need to make a new DPS nomination.
In addition, members aged 60 and above but below 65 years who wish to rejoin DPS can do so by applying directly with Great Eastern when the new contract comes into effect, CPF Board said.