CPF is a very good scheme for Singaporeans towards savings for their retirement. Some monitor their CPF monies actively, some don't. Some don't even know what are the accounts in their CPF. Today, I just like to highlight the insurance schemes that are embedded in our personal CPF account.
a) Medishield / Private Medical Insurance Scheme
* MediShield is an individual catastrophic medical insurance designed to help Singaporeans pay part of the large hospitalisation bills for treatment of serious illnesses or prolonged hospitalisation at the Class B2/C level.
* Besides citizens, the scheme is also extended to Singapore Permanent Residents (SPR) who are eligible for subsidised medical care in restructured hospitals in Singapore.
* If you had taken another Shield plan from a private insurer, then your Medishield is most likely being integrated.
b) Dependent Protection Scheme
* The DPS is an affordable term insurance scheme that provides insured members and their families with some money to get through the first few years should the insured members become permanently incapacitated or pass away.
* DPS is currently administered by 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.
* The premium are deducted from your CPF Ordinary Account.
c) Eldershield
* ElderShield was first launched by the Ministry of Health in September 2002 as an affordable severe disability insurance scheme which provides basic financial protection to those who need long term care.
* All Singaporeans and Permanent Residents (PRs) who are CPF members and who reach the age of 40 are automatically covered under ElderShield unless they opt out of the scheme.
* Premiums for ElderShield can be made from CPF members' Medisave Accounts.
* It provides either $300/mth x 60mth or $400/mth x 72mths are paid out in event you cannot perform any of the 3 ADLs (Activities of Daily Living). Your provider is either GE or NTUC Income. You may wish to check out your existing coverage with them.
d) Home Protection Scheme
* The Home Protection Scheme (HPS) is a mortgage reducing insurance which insures CPF members and their families against losing their homes should members become physically/mentally incapacitated or pass away before their housing loans are paid up.
* The scheme is compulsory for those using CPF to pay their mortgage loan. The share of the HPS cover should match the proportion of your monthly housing instalments that you are paying.
Monday, July 14, 2008
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6 comments:
Hi Adrian
I believe the CPF DPS Scheme is only compulsory for those who buy HDB flats?
I took a commercial bank loan AND use CPF monies to pay the loan but I had to take mortgage insurance with private insurance company so it's not too accurate to say that DPS scheme is compulsory for those who pay mortgages using CPF?
Just a clarfication.
Be well and prosper.
Hi Adrian
I don't quite agree with you that CPF is a good scheme.
It's objectives have become too diffused to be effective as a pure retirement tool. To force residents to save for retirement, CPF should not be used for home ownership as we have the proverbial "asset rich cash poor" situation for many retirees upon reaching retirement age. They can only cash out if they sell their properties and downgrade or engage in reverse mortgages.
CPF started out as a retirement scheme but has ended up a hybrid that makes no-one happy.
Hi Panzergrenadier,
I think you are confused between HPS and DPS.
DPS is a opt-in scheme for those between 16 to 60 when they first contribute to their CPF savings.
It is currently administered by NTUC Income and Great Eastern. Most of us are covered between $46,000 to $50,000.
One very large shortcoming of the CPF scheme is the low interest we are getting from it. GIC took our money, get double digit returns and gave us back 2.5%. To me, this is a government scam. But put it aside, the forced savings is good.
Sorry. Its Auto Opt-in Scheme. Forgot to write "Auto" in my last comment.
Is eldershield auto opt-in? After reading your post I was trying to find out whether I have insured with that. Tried calling CPF board but cannot get through even after several tries. Checked my statement on-line but could not find any deductions for eldershield. It is quite ridiculous actually but the fact is I am not sure what I have signed up.
Hi Adrian
Opps, I got DPS and HPS confused. What I meant to say is CPF HPS is only for those who buy HBD flats. If you are buying private properties you have to buy your own mortgage insurance.
Forced savings is good only if the returns are decent. 2.5% returns on CPF OA during years when savings/fixed deposits offered higher returns didn't do any favours to CPF members. :-(
On a side note, all the best for the audit. No-one likes being audited.
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