Dependants' Protection Scheme (DPS): Should You Opt Out?

The Dependants’ Protection Scheme (DPS) might have just landed on your radar, but what exactly does it offer?

Is it worth holding onto, or does it fall short of what you need?

In this guide, we’ll break down the key features of DPS, explore its benefits, and highlight its limitations to help you decide if it’s right for you.

This article has been updated to reflect the latest changes effective from 1 April 2021. Let’s dive in.

What Is the Dependants’ Protection Scheme (DPS)?

The Dependants’ Protection Scheme (DPS) is a form of term life insurance designed to provide some financial protection for those insured under the scheme.

Is it compulsory? No.

DPS is optional, and you can choose to opt out if you wish. But should you? Read on to find out.

The scheme was privatised on 17 September 2005 and is now exclusively available to CPF members. Currently, it is administered by a single insurer — Great Eastern (GE).

Once enrolled, you’ll receive a welcome package from GE, explaining the details of your coverage.

Before 1 April 2021, Income Insurance (formerly NTUC Income) was also administering DPS. However, their responsibilities have since been transferred to GE, which now manages all DPS-related matters.

If you were previously under Income Insurance, there’s no immediate action required from you. That said, you might need to submit a new nomination form to GE to ensure your records are up to date.

SIDE NOTE

When was the last time you conducted thorough financial planning or reviewed your finances?

In this day and age in Singapore, doing so will absolutely improve the quality of life for you and your loved ones.

Here are 5 reasons why financial planning is so important.

What Does the DPS Cover?

Under the Dependants’ Protection Scheme (DPS), you’re insured for up to $70,000 until age 59 (last birthday). From age 60 to 64 (last birthday), the maximum sum assured drops to $55,000. Beyond that, coverage ends, and you’ll no longer pay premiums.

DPS provides payouts for the following insured events:

• Death
• Terminal Illness
• Total and Permanent Disability

It’s important to note that DPS is a form of term insurance, meaning it does not accumulate any cash value. Its primary purpose is to offer maximum coverage at an affordable premium.

In simple terms, you pay a premium to stay covered. If you decide the coverage isn’t for you, you can opt out. Should you want to rejoin later, you’ll likely need to go through underwriting.

If you pay premiums all the way to age 65 without making a claim, you won’t receive any refunds or payouts. However, that’s a positive outcome — because it means you’ve stayed in good health throughout the years.

You’ll be automatically enrolled in DPS if you meet these criteria:

• You’re a Singapore Citizen or Permanent Resident
• You’re between 21 and 65 years old
• You’ve made your first CPF contribution

If you’re between 16 and 21 years old, you won’t be automatically enrolled, but you can apply manually to join the scheme.

What Are the Premiums for DPS?

Here are the premiums for DPS:

Age	New Yearly Premium (After 1 April 2021; for $70,000)	Old Yearly Premium (Before 1 April 2021; for $46,000)
34 years and below	$18	$36
35 – 39 years	$30	$48
40 – 44 years	$50	$84
45 – 49 years	$93	$144
50 – 54 years	$188	$228
55 – 59 years	$298	$260
60 – 64 years	$298 (for $55,000)

With the new changes, DPS now offers higher coverage at a lower premium.

However, keep in mind that premiums increase with age. This means that even if you start early, your premiums won’t be locked in — they’ll adjust as you move into higher age bands.

Alongside the Home Protection Scheme (HPS), the Dependants’ Protection Scheme (DPS) is one of the few life insurance plans that can be paid using CPF savings.

Other national schemes that allow payment through CPF savings include:

• MediShield Life
• Integrated Shield Plans
• ElderShield
• CareShield Life

By default, DPS premiums are deducted from your CPF Ordinary Account (OA). If your OA balance is insufficient, the deduction will be made from your CPF Special Account (SA). Should both accounts lack sufficient funds, you can make a cash payment.

It’s worth noting that DPS is an individual scheme, so premiums can only be paid from your own CPF account. If you’d like your parents or spouse to be covered under DPS, they’ll need to pay their premiums from their own CPF accounts.

How to Check If You’re Insured Under DPS?

Steps to check whether you have DPS:

1. Visit the CPF website
2. Log in using your SingPass
3. Click on “my cpf”, then select “Providing for your loved ones”
4. Navigate to the “term life insurance” tab

If you’re covered, you should see the following information displayed.

Making a DPS Nomination

A DPS nomination ensures that the death claim benefit is paid to your nominated beneficiaries. It’s important to note that this nomination applies only in the event of death.

For claims due to terminal illness or total and permanent disability, the payout will be made directly to the insured member instead.

By submitting a nomination, you make it easier for your family to receive the benefit without delays caused by legal processes.

It’s worth mentioning that a CPF nomination does not cover DPS, as they are separate schemes. To nominate beneficiaries for your DPS, you’ll need to complete and submit a nomination form to Great Eastern.

If you want to update your nomination in the future, you can do so by submitting a new form.

Additionally, if you made a DPS nomination under Income Insurance before 1 April 2021, you’ll need to re-submit your nomination with Great Eastern to ensure it’s up to date.

Making a DPS Claim

What qualifies as an eligible claim?

Here are the claim definitions:

Terminal illness: an illness that is likely to result in the death of the member within 12 months

Total permanent disability: (i) the inability to take part in any employment permanently, or(ii) the total permanent loss of physical function of any of the following: both eyes, or two limbs, or one eye and one limb

(If you’re interested, check out our study on life insurance claim statistics in Singapore.)

But there are exclusions too.

DPS benefits will not be payable if the following happens in the first year:

• Member committed self-inflicted injury or suicide
• Member committed a criminal offence punishable by death
• The claim arose out of member’s own intentional criminal act

DPS will also not be payable if:

• Member was not in good health before the commencement of DPS cover
• Member provided false or misleading information
• The claim arose from wars or any war-like operations or participation in any riot

If you have an eligible claim, you’ll need to approach Great Eastern to begin the process. Be prepared to submit the required claim forms and supporting documents to facilitate the claim.

DID YOU KNOW?

According to a survey conducted by MoneySense, about 3 out of 10 Singapore residents aged 30 to 59 had not started planning for their future financial needs.

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3 Reasons to Stick With DPS

Here are three key reasons to keep DPS:

1) Premiums are affordable

DPS premiums are relatively low, especially for younger individuals in the lower age bands. For $70,000 of coverage, the cost is minimal and unlikely to strain your budget. As long as you’re earning an income, paying the premiums shouldn’t be a challenge.

2) Ability to use CPF monies

While cash is versatile and can be used for various needs, CPF funds come with restrictions. DPS allows you to use your CPF Ordinary Account (OA) or Special Account (SA) funds to cover the premiums. This means you can save your cash for other expenses or commitments.

3) Provides some form of protection

Your income is crucial to supporting both yourself and your loved ones. DPS provides a basic safety net, offering financial support if an unexpected event occurs. The automatic enrolment also saves you the effort of applying manually, ensuring you’re covered right from the start.

The Downsides of DPS

Coverage may not be enough.

DPS is designed as a basic national scheme, providing coverage for everyone. However, the $70,000 payout may fall short, especially when factoring in the permanent loss of income.

After the payout is exhausted, where would funds for ongoing expenses come from? If you’re the primary breadwinner, securing sufficient income protection is vital.

Also, DPS doesn’t cover critical illnesses, which are more likely to occur than death or total permanent disability when you’re young. These illnesses often come with significant medical costs and potential loss of income.

If you’re unsure how much coverage you need, consider using our life insurance calculator. For better protection, explore other insurance options like term or whole life plans. These provide higher coverage and may include critical illness benefits.

Conclusion

For young individuals, the premiums for DPS are low and typically paid via CPF, so there’s little reason to opt out. However, cost shouldn’t be your only consideration.

DPS offers a basic level of protection, but for most people, this “basic” might not be enough. It’s often the first life insurance plan someone has — sometimes unknowingly — but it’s unlikely to meet your long-term financial protection needs.

If you’re ready to take your financial planning further, start by assessing how much life insurance coverage you require. From there, explore other options such as term or whole life insurance plans that offer more comprehensive protection for you and your family.

Disclaimer: The statements or opinions expressed on this site are of my own. The information is meant purely for informational purposes and should not be relied upon as financial advice.