Review of Maximum Age Cap for Coverage under Dependants' Protection Scheme
Ministry of ManpowerSpeakers
Summary
This question concerns Er Dr Lee Bee Wah’s inquiry regarding the next review of the maximum age cap for the Dependants' Protection Scheme (DPS) and the adequacy of coverage for members starting families later. Minister for Manpower Josephine Teo stated that the age 60 limit balances insurance protection with retirement adequacy, as raising the cap would significantly increase premiums and deplete CPF savings. She noted that most members have fewer financial dependants after age 60 and can utilize accumulated CPF bequests to provide support. Minister for Manpower Josephine Teo highlighted that members requiring additional coverage may purchase private insurance with cash. The Ministry will continue to review the scheme's aspects to ensure it remains relevant to members' needs.
Transcript
27 Er Dr Lee Bee Wah asked the Minister for Manpower (a) when will the next review of the maximum age cap for coverage under the Dependants' Protection Scheme be; and (b) whether the Ministry has considered that the current generation is starting families at a later age and hence may still have dependants at age 60.
Mrs Josephine Teo: The Dependants' Protection Scheme (DPS) is a term-life insurance scheme that provides CPF members and their family a basic level of financial relief at affordable premiums in the event of terminal illness, total permanent disability or death.
The decision to offer DPS coverage up till 60 strikes a balance between providing insurance protection for the member's dependants and his need for adequate retirement savings:
(a) First, raising the maximum coverage age beyond 60 would result in significantly higher premiums due to higher mortality rates after age 60. DPS premiums are paid out of members' CPF accounts, and paying for significantly higher premiums would compromise members' retirement adequacy.
(b) Second, after age 60, the need for DPS is significantly reduced as most members are less likely to have children who are financially dependent. Those who started families later and may still have dependants are likely to have accumulated savings in their CPF accounts which could be bequeathed to their dependants.
Members who prefer additional insurance protection may use cash to purchase insurance products from private insurers.
We will, however, continue to review other aspects of the scheme to ensure that DPS continues to be relevant to members.