We have always been told that we should buy some insurance to protect our family and ourselves. At the same time, we see swarms of insurance agents always happy to provide “non-obligatory planning sessions” to discuss our financial situation and identify possible gaps in our insurance needs.
However, before you start any discussion with an agent on insurance, it might be worth spending some time first understand some of the insurance policies that you may already be covered for, but don’t know about.
Some of these policies are auto-inclusions while others could be policies that you may have bought previously, but forgotten about it.
1. Dependants’ Protection Scheme
The Dependants’ Protection Scheme (DPS) is an opt-out life insurance scheme, which is automatically extended to eligible CPF members.
The DPS is essentially a term insurance coverage that provides a sum assured of $46,000 up to the age of 60. In the event of death, or permanent incapacity, the scheme will pay out the sum assured to you or your dependents.
$46,000 is not a huge sum of money. Thus, you should look at this scheme as supplementary coverage in addition to a separate life insurance plan, which you should also consider if you have dependents.
The good thing about the DPS is that it is auto-renewed each year with the premiums deducted from your CPF account. As such, no cash outlay is required on your part, as compared to normal life insurance plans. Aside from being able to use your CPF money to pay for coverage, the premiums are also relatively affordable, especially below the age of 50.
|Age (Last Birthday)||Yearly Premium|
|34 years and below||$36|
|35 – 39 years||$48|
|40 – 44 years||$84|
|45 – 49 years||$144|
|50 – 54 years||$228|
|55 – 59 years||$260|
2. Home Protection Scheme
When you purchase a new HDB flat, the friendly staff working at Toa Payoh would have asked you if you would like to sign up for a mortgage-reducing policy call the Home Protection Scheme (HPS). Definitely go for it.
Just like the DPS, the HPS provides coverage in the event of death or permanent incapacity of a homeowner who has an existing HDB mortgage. This works as a decreasing term policy, where the payout will be lesser in accordance to the lower existing housing loans as the mortgage slowly gets cleared.
Coverage for the HPS can be adjusted according to preference. For example, you can opt to have partial coverage for the loan amount, which should ideally match the proportion of your monthly contribution to the loan repayment. For a $200,000 housing loan, a couple may decide to insure each of themselves for $100,000 each.
Alternatively, you can opt for 100% coverage for both husband and wife, which means that the housing loan automatically gets cleared if something happens to either spouse.
The good thing about the HPS is that you can use your CPF Ordinary Account to pay for the premium. So rather than spend cash insuring yourself for a higher coverage with a life insurance plan, you can opt in for the HPS, which would reduce the amount of life insurance you need.
When you add the DPS to the HPS, some HDB homeowners could easily have about $300,000 worth of insurance coverage that they may not even consider when discussing life insurance policies with insurance agents.
3. MediShield Life
Medishield Life is a basic insurance scheme compulsory for all Singapore Citizens and Permanent Residents. Its primary aim is to ensure affordable and subsidised treatment in B2/C class wards in public hospital for the population.
No one is excluded, regardless of their age or pre-existing illness. Premiums from Medishield Life are automatically deducted from your Medisave Account.
4. HDB Fire Insurance
Provided by eTiQa Insurance, the HDB Fire Insurance policy is compulsory for homeowners who take up HDB housing loans. Premiums are ridiculously cheap at $5.50 for 5 YEARS (or $1.10 per year) for a 4-room flat.
This insurance policy covers the flat’s internal building structure, fixtures and fittings provided by HDB. That means in the event of a fire, the insurance policy would pay the cost required to reinstate it to its original HDB condition.
To clarify matters, “original” reinstatement does not include any of the costs required to cover your expensive renovations, furniture, or personal possessions. You need a separate enhanced home insurance scheme for that.
5. Your Union’s Insurance
Do you belong to a union? If the answer is “yes”, then there is a good chance that you already have some additional form of insurance coverage in place that you again may not even know existed.
In the case of NTUC, Singapore’s biggest union, a group insurance policy called NTUC GIFTS provides a payout of up to $40,000 in the event of death or permanent disability. So aside from all the discounts that you are already enjoying at Foodfare, you also get insurance coverage thrown into the mix.
6. Travel insurance
If you’re into accumulating miles when you travel, chances are you are using a credit card that offers travel insurance. Note that not all credit cards are created equal, and you should check what you are covered for, and if you require additional coverage in your travels.
Some factors to to take note of when you’re looking at your travel insurnace needs are death and total permanent disability coverage, medical expenses coverage, baggage delay/loss coverage and flight delay/interruption coverage.
Know Your Insurance Schemes
So before you spend some time discussing with an agent on what you need, it is worth spending some time first to know what is it that you already have.
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