Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Sunday, 10 May 2015

Reduce your Insurance Cost

Today's post is to give you a tip on how you can save up on your monthly/annual insurance premiums.

If you have made contributions to your CPF, you are most likely enrolled into the CPF's Dependents' Protection Scheme (DPS).
DPS is a life insurance scheme that provides your family with a lump sum of $46,000 when you:
1) become mentally or physically incapacitated from ever continuing in any form of employement
2) passed away

Its is a term insurance and is meant to insure you until you reach the age of 60.
In simple words, it is a term life insurance that insures you up to $46,000 and is paid by your CPF money.

If you are currently signed onto 'Dependents' Protection Scheme', you are being protected of $46,000.
This insurance's premium is paid via your CPF Ordinary Account (OA).
If you are unsure if you have this, you may check this via your CPF account.
If you would like to know the insurance premium's cost, please click this HERE

However, I would like to share with you that, when you are buying an external life insurance, you may wish to remove $46,000 from the sum that you think you wish to insure yourself from.

You need to buy an term life insurance for your family. You wish to be insured for $150,000. Instead of buying the whole $150,000; minus away $46,000 from that figure.
Get yourself insured of $104,000 will do. This is to prevent you from double insuring yourself and end up paying extra for insurance.

The amount you end up saving from not insuring that extra $46,000 could range from $75-$100 annually. While this may not seem like a large sum, extend it over 40 years and it would cost you between $3,000 - $4000 in total.
Why pay extra for money you do not need when it could be better spent by treating your family to a good meal.
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