Central Provident Fund (CPF) members under the Dependants’ Protection Scheme (DPS) will enjoy a higher sum assured of $70,000 at more attractive premiums from April 1, 2021.
The maximum age of coverage will be increased to cover members up to 65 years old at a lower sum assured of $55,000.
Currently, the sum assured is $46,000 with an age cap of 60 years old.
CPF says that the new scheme will see a reduction of about 47% for the premium per thousand-dollar sum assured.
“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, e.g. children who have reached adulthood,” says CPF in a statement on Oct 2.
“This strikes a balance between the member’s need for financial protection and conserving more of their CPF for higher retirement payouts,” it adds.
Great Eastern Life, the life insurance group which is a member of the OCBC group, has been award a five-year contract to administer the DPS from April 1, 2021. The group won the bid through a “competitive” tender process.
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.
Members with an active DPS cover will not have to take any action, as their DPS covers will be automatically renewed before their 65th birthday. Members insured under NTUC Income will be moved to Great Eastern Life when it takes over the sole administration of DPS.
“DPS is meant to protect the member and his dependants during his working years. The higher sum assured of $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,” says group director for housing and investment group at CPF, Peh Er Yan.
“This higher sum assured also comes with premiums which are more attractive than the current ones,” Peh adds.
“We are pleased that the CPF Board has appointed Great Eastern as the insurer for the new Dependants’ Protection Scheme. We will do our utmost to support DPS members with their protection needs and we look forward to partnering CPF Board to deliver quality service and a positive customer experience to the 1.9 million existing and new members under the scheme,” says Great Eastern group CEO Khor Hock Seng.
CPF on Sept 25, said that it will maintain its 4% interest rate till December 2021.
As at 10.56am, shares in Great Eastern are trading 7 cents lower, or 0.4% down, at $18.28.