5 types of insurance that Singaporeans can pay for with their CPF account

In Singapore, the Central Provident Fund (CPF) plays a crucial role in helping citizens and permanent residents manage their healthcare, housing, and retirement needs. One of the lesser-known benefits of the CPF system is the ability to use CPF savings to pay for various insurance policies. This article will explore five essential insurance policies that Singaporeans can fund through their CPF accounts, providing comprehensive protection for themselves and their families.

1. MediShield Life: Basic Health Insurance for All

MediShield Life is a fundamental health insurance scheme that provides lifelong protection against large hospital bills and selected costly outpatient treatments. As a national health insurance scheme, it covers all Singapore citizens and permanent residents, regardless of age or pre-existing conditions.

Key features of MediShield Life:

Automatic coverage for all Singaporeans and PRs

No exclusions for pre-existing conditions

Lifetime coverage with no claim limit

Covers large hospital bills and selected outpatient treatments

According to the CPF Board, "MediShield Life helps to pay for large hospital bills and selected costly outpatient treatments such as dialysis and chemotherapy for cancer. It is structured so that patients pay less MediSave/cash for large hospital bills."

2. Integrated Shield Plans: Enhanced Health Coverage

While MediShield Life provides basic coverage, many Singaporeans opt for additional protection through Integrated Shield Plans (IPs). These plans combine MediShield Life with extra private insurance coverage, offering higher claim limits and coverage for treatment in private hospitals or higher-class wards in public hospitals.

Benefits of Integrated Shield Plans:

Higher claim limits compared to MediShield Life

Coverage for private hospitals and higher-class wards

Additional benefits such as pre and post-hospitalization coverage

Option to add riders for more comprehensive protection

It's important to note that while the MediShield Life portion of an IP can be fully paid using CPF MediSave, there may be additional premiums for the enhanced coverage that require cash payment.

3. ElderShield and CareShield Life: Long-Term Care Insurance

ElderShield and its successor, CareShield Life, are long-term care insurance schemes designed to provide financial support in the event of severe disability, especially during old age.

ElderShield:

Provides monthly cash payouts for up to 72 months

Covers Singapore citizens and PRs born in 1979 or earlier

Premiums can be fully paid using CPF MediSave

CareShield Life:

Replaces ElderShield for those born in 1980 or later

Offers higher payouts that increase over time

Provides lifelong coverage

Premiums can be fully paid using CPF MediSave

As stated by the CPF Board, "CareShield Life provides basic financial protection against the costs of long-term care, should you become severely disabled."

4. Dependants' Protection Scheme: Term Life Insurance

The Dependants' Protection Scheme (DPS) is an affordable term life insurance plan that provides coverage for CPF members and their families. It offers a payout to insured members and their families in the event of death, terminal illness, or total permanent disability.

Key features of DPS:

Coverage of up to $70,000

Affordable premiums that can be fully paid using CPF Ordinary Account or Special Account

Automatic coverage for eligible CPF members

Option to opt out or increase coverage

The Dependants' Protection Scheme (DPS) is a term life insurance program that offers financial assistance to insured members and their families in the event that the insured members pass away, suffer from a terminal disease, or become totally and permanently disabled. This assistance is intended to help the covered members and their families get through the first few years together.

5. Home Protection Scheme: Mortgage Reducing Term Assurance

The Home Protection Scheme (HPS) is a mortgage reducing term insurance that protects CPF members and their families against losing their HDB flat in the event of death, terminal illness, or total permanent disability. This scheme is mandatory for CPF members using their CPF savings to pay for their HDB housing loans.

Benefits of the Home Protection Scheme:

Ensures your family can keep their HDB flat if you're unable to make mortgage payments

Premiums can be fully paid using CPF Ordinary Account

Coverage amount reduces as your outstanding housing loan decreases

Automatic renewal with no medical underwriting required

The CPF Board emphasizes, "The Home Protection Scheme (HPS) is a mortgage-reducing insurance that protects members and their families against losing their HDB flat in the event of death, terminal illness or total permanent disability."

Maximizing Your CPF for Insurance Protection

By utilizing these five insurance policies that can be paid through CPF accounts, Singaporeans can build a comprehensive safety net for themselves and their families. Here's how to make the most of these options:

Assess your needs: Evaluate your health, financial situation, and family responsibilities to determine which policies are most crucial for you.

Understand the coverage: Familiarize yourself with the benefits and limitations of each policy to ensure you're adequately protected.

Review regularly: As your life circumstances change, review your insurance coverage annually to ensure it still meets your needs.

Consider supplementary coverage: While these CPF-funded policies provide essential protection, you may want to explore additional private insurance options for more comprehensive coverage.

Seek professional advice: Consult with financial advisors or insurance professionals to help you make informed decisions about your insurance portfolio.

The ability to pay for insurance policies using CPF savings is a valuable benefit for Singaporeans, providing access to essential protection without straining monthly cash flow. By understanding and utilizing these five insurance policies – MediShield Life, Integrated Shield Plans, ElderShield/CareShield Life, Dependants' Protection Scheme, and Home Protection Scheme – Singaporeans can build a strong foundation of financial security for themselves and their loved ones.

Remember, while these policies offer significant benefits, it's essential to consider your individual needs and circumstances when making insurance decisions. Regular review and adjustment of your insurance coverage will ensure that you remain adequately protected throughout different stages of your life.