Singapore Government Insurance Schemes: CPF Funded Options

Did you know that there are Singapore Government Insurance Schemes funded by CPF automatically?

These schemes are designed to provide protection for you and your loved ones in an unexpected tragedy.

This article will take a quick overview of the different schemes and how they can benefit you.

Dependant's Protection Scheme

The Dependants' Protection Scheme is a term life insurance plan automatically extended to all Singaporeans and PRs who are 21 years old or older. It isn't necessary, but you must manually opt-out if you don't want to be covered. Otherwise, you will be covered for a maximum sum assured of $70,000 up to your 65th birthday.

This scheme gives CPF members basic financial protection at relatively affordable premiums. In addition, these premiums are payable by your CPF Ordinary Account or Special Account, so there's no reason not to continue this scheme.

MediShield Life

MediShield Life is a basic health insurance plan that all Singaporeans and PRs are automatically enrolled in and cannot Opt-Out of.

This scheme covers you for hospitalisation in an accident or illness. It also pays for some outpatient treatments, such as chemotherapy and dialysis.

The primary purpose of this scheme is to cover subsidised treatment in B2/C ward types.

Suppose you incur bills in A, B1, or B2+ ward types in public or private hospitals and have obtained coverage under MediShield Life. In that case, the claim will be adjusted to reflect the equivalent B2/C charges and then limited by MediShield Life claim limits. You will need to withdraw cash or use your MediSave account to pay the remaining amount.

What's excellent about MediShield Life is that it is integrated with Medisave, so you can use your Medisave to pay for your premiums. In addition, the government has recently enhanced the coverage of MediShield Life so that it now covers more serious illnesses and offers higher payouts.

And if you want to have higher coverage or coverage for A, B1, or B2 ward types, there are the integrated shield plan options.

CareShield / ElderShield

As of 1 October 2020, all Singaporeans and Permanent Residents (PRs) born in 1980 or later will be automatically enrolled into CareShield Life when they reach age 30.

Before this, you would have been enrolled into an ElderSheild plan with an option to switch.

For those who belong to this group, you would either be in ElderShield 300, initially launched in 2002 as basic long-term care insurance. In 2007, ElderShield 400 was introduced to provide greater monthly disability payouts for a longer period.

CareShield Life is a further enhancement to ElderShield coverage. Under this scheme, you'll get a higher starting monthly disability benefit. About $300 or $400 more than ElderShield, this benefit is projected to increase at 2% p.a. until age 67.

However, the best part about this scheme is that it covers all Singapore citizens and PRs for life. Especially those with pre-existing severe disabilities who would have been uninsurable.

CPF Life

CPF Life was created to be a retirement tool, and that's where it truly shines, delivering steady payments to Singaporeans when they reach the age of 65.

It's an essential component of the CPF system because it helps guarantee that Singaporeans have a pleasant retirement.

There are a few things that make CPF Life unique.

First, it is backed by the government, so you can be assured that your money is safe.

Second, it offers flexibility regarding how much you want to receive each month. You can choose to receive a higher payout for a shorter period or a lower payout for a longer time.

This flexibility means you can tailor your CPF Life payout to suit your individual needs.

Finally, CPF Life payouts are guaranteed for life. So, even if you live to a ripe old age, you will still receive payouts from CPF Life.

(With some exceptions, depending on the plan you choose)

Conclusion

These are just some government insurance schemes that you should be aware of. Each one has its own benefits and features, so it's important to choose the one that best suits your needs.

Most importantly, remember that these schemes are in place to help you financially in an accident or illness and for your retirement goals.

So, make sure you have already considered them in your financial plan. Otherwise, you might want to speak with a financial consultant soon.