Have you ever thought about CPF as more than just a scheme to lock Singaporeans' money?
There could be a lot more to it if you dig deeper - like really deeper.
There is a reason why most financial advisors actually advise you to keep your money with CPF.
Not because CPF pays them, but because CPF as a scheme is quite good - except the part where you cannot withdraw money as and when you like.
Instead of looking at the CPF Retirement Sum as a target where you can withdraw money after a certain age, look at it as a Savings + Medical + Life + Home + Annuity insurance plan.
Savings Insurance
It helps you save up money for housing, medical, kids' education, and retirement.
The "forced to contribute" part ensures that you really save your money every month.
The "cannot withdraw" part ensures that you do not anyhow withdraw this money to spend it.
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Medical Insurance
We have got Medishield Life, Eldershield, and other medical insurance schemes that are paid by the Medisave Account.
Medishield Life covers you regardless of your age or pre-existing conditions.
Most private insurance will not cover your pre-existing conditions - if you have asthma since young, chances are you are not going to be insured for it under your private health insurance plan.
However, it will be covered under Medishield Life.
Life Insurance
In the event that you passed away, all your CPF money will be passed to your dependents.
If you had bought the
Dependents' Protection Scheme (DPS) for yourself, in the event of you passing away or becoming mentally or physically unable to work anymore, you will receive an insurance payout of $46,000.
Home Insurance
There is also a Home Protection Scheme (HPS), a housing insurance that will pay your mortgage in the event that any mishap falls on you and result in you no longer able to pay your mortgage.
If you are paying your HDB loan using your CPF savings, it is mandatory for you to purchase the HPS.
However, the monthly premiums are paid through your CPF - you save cash.
Annuity Insurance
An annuity is an insurance that you pay premiums to an insurance company every month, and in return, when you reached a certain age (usually retirement age), the insurance company will pay you a fixed monthly payout for as long as you live.
However, if you die early/young, the payouts will stop, which is not worthwhile if you paid 20 years of premium and took only 10 years of payouts.
When you reach 55, CPF automatically enrols you for CPF LIFE, which is an annuity plan that pays you a fixed monthly payout when you reached the retirement age (65).
However, it is better than just an annuity plan. In the event that you passed away before fully utilising the funds in your CPF LIFE, the unused money (the whole sum) will be passed to your dependents just like a Life Insurance. This feature is usually unavailable for most annuity insurances.
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And that is the 5 insurances CPF provides you with.
Are there any more that you can think of?
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