Dear Mr. Tan,
May I know what is the difference between DPS (Dependent Protection Scheme) and ordinary term insurance? Why does CPF board limit the coverage to a maximum of $46,000? It seems that I cannot opt for higher sum assured.
REPLY
DPS is a yearly renewable Term. The premium rate depends on the age in each year. It is lower when you are young and increases when you grow older.
An ordinary Term fixes the premium rate for the selected term, say 10 or 20 years.
As DPS is a developed as a national scheme, the Government decided to fix the coverage at a certain level that is applicable to everyone.
If you wish to have a higher coverage, you have to buy a Term insurance to supplement it.
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