Do You Terminate Your DPS And Eldershield Because Of The Premiums?

There is still a strong sign of Singaporeans terminating their Dependent Protection Scheme and Eldershield simply because of these reasons:

1. If I do not die, be permanently incapacitated before the age of 60 (for the case of DPS) or unable to commit to at least 3 out of the daily 6 activities (for the case of Eldershield), the total premiums paid by me are down the drain

2. I do not know what these plans are all about.

3. My CPF accounts (Ordinary and Medisave) will run out because of these plans if i continue to pay.

And when unforeseen circumstances do happen, some of the fingers are actually pointing to the insurance companies for not doing their best to ask the Policy Holders to keep the plan or that the plan was terminated without the Policy Holders’ acknowledgement (they do happen!)

Then there will be a tough time asking for the revival of the plans… asking for leniency and such…

The Premiums Paid Is Just A Small Price…

Let’s calculate the total premiums paid when you first get in (entry age is 16 if you do make your first CPF contribution) to age 60:

  • Age 16 – 34, $36 per year, a total of 19 x $36 = $684
  • Age 35 – 39, $48 per year, a total of 5 x $48 = $240
  • Age 40 – 44, $84 per year, a total of 5 x $84 = $420
  • Age 45 – 49,  $144 per year, a total of 5 x $144 = $720
  • Age 50 – 54, $228 per year, a total of 5 x $228 = $1140
  • Age 55- 60, $260 per year, a total of 5 x $260 = $1300

Making a total premiums paid of $4504 during a duration of 45 years, an average of $100 per year, $8.33 per month, $0.28 per day but covering you for a lump sum $46,000 (not including the bonuses). And should anything happen meanwhile, the return-fold is 46,000/100 = 460 times instantly.

How About ElderShield?

The average yearly premium for a male of 40 years old who just got enrolled into Eldershield 400 is at $174.96. And this premium is fixed and payable till age 65 and the coverage is for the rest of his life. So total premium paid is 26 x $174.96 = $4548.96 and should something happen, the payout is $400 x 12 x 6 = $28,800.

So from the basic calculations above, the premiums you pay for a peace of mind to yourself and to your family is comparatively small when, in most times, you…

  • Indulge in pampering yourself with treats like gadgets, branded items, and/or small gambling of chance.
  • Do not really feel the pinch as the premiums are coming from your CPF Ordinary and Medisave Account. Most people will use the Ordinary account for purchasing of house (impact is still small) and for paying of medical services and treatment.
  • Are earning interests for your CPF accounts – currently at 2.5% for your Ordinary account and 4% for your Medisave account
  • Have family members to help you service the premiums if you do not really have enough in your accounts because when there’s any unforeseen circumstances, they will be obliged financially as well. Helping you to pay for the premium is just a small effort.

Don’t Think You Are Always Safe When…

…Anything can happen to anyone anytime. Death may just come unexpectedly even to people who are healthy. Long term illnesses like Stroke may also happen to people irregardless of age.

Point is… Insurance is there for a reason. You may not want to activate the benefits of your insurance policies but at least get them to give yourself and your family a peace of mind. Paying a small price (the premiums required) is for the exchange of this peace of mind.

So next time when you or your friends who are really considering to terminate their DPS and Eldershield, please think through properly. If anything should happen, you may not be around any longer, but think of what you could have leave behind (loans, medical bills) for your rest of your family.

Take care!

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comment 6 comments
  • Ian

    Hi,

    From this statement “If I do not die, be permanently incapacitated before the age of 60 or unable to commit to at least 3 out of the daily 6 activities, the total premiums paid by me are down the drain”, does it mean if one is incapacitated before age 60, one does not get the payout from Eldershield? I searched through Eldershield T&Cs but couldn’t locate such a condition. I thought it’s simply not able to perform 3 of the 6 activities, then one get the payout, regardless of age when the conditions met (as long as covered after age 40).

    Pls advice.

    Thanks.

    • Dexter Damien Chan

      Hi Ian, thanks for your comment. I believe you have to read my sentence in two parts (and sorry if I have caused any confusion) – “1.If I do not die, be permanently incapacitated before the age of 60” is applicable to DPS and “unable to commit to at least 3 out of the daily 6 activities”, is applicable to Eldershield. I lumped these two statements up because during the course of my work – there were many instances that customers terminate both plans upon knowing the nature of coverage…

      And with regards to your incapacitation before the age of 60 and whether can you still get the payout from Eldershield would greatly depends on the level of incapacitation (as confirmed by a medical specialist) and if it still fulfils the inability to perfom 3 out of 6 daily activities (subjected to the insurance company’s claim process).

      You are right to say “it’s simply not able to perform 3 of the 6 activities, then one get the payout, regardless of age when the conditions met (as long as covered after age 40)” – to be able to start claiming from Eldershield. But still need to highlight that for any valid claims, there’s a need to be verified by a medical specialist and fulfilled the claim process/requirements of the insurance company.

      Hope my replies help to clarify. If not, please do feel free to comment further.

  • 16yo Poly Student

    Thanks for explaining all these! 🙂
    Helped me to calculate my future, i will keep my dps then! 😀

    cheers and all the best !

  • Jonathan

    the cost-benefit for DPS and ElderShield makes sense. Good of you to post this!

  • Edwin

    Hi,

    For Eldershield, if you are the last man standing (for singles) and you already cannot do washing, dressing, feeding, toileting, mobility and Transferring. How can you activate the plan? and notify the authority that you are down? (given the scneario that no kins are left)?

    • Dexter Chan

      Hi Edwin, thanks for your comment. Before you can make any claim, check the insurer who is taking care of your claim and make sure it is still in-force (e.g. all premiums paid). They will be the one assessing and processing the claim. There is criteria (e.g. at least 3 out of 6 ADLs & Insurer Appointed Doctor’s Confirmed Assessment) before you are entitled to any claim. MOH has a link (https://www.moh.gov.sg/content/moh_web/eldershield/claims.html) for your references. For singles, it will depend how well you have planned for it. Anything happened *touch wood*, you will have to depend on your friends or any social help, possibly to arrange for a private caregiver or maybe a nursing home to take care of you. The payouts from Eldershield will help to a certain extent. If you have a concern for this, talk to a financial planner and do some planning for this. Hope this helps.

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