DEPENDANTS' PROTECTION INSURANCE SCHEME (Options)

Mr Chng Hee Kok asked the Minister for Labour how many Central Provident Fund members have opted out of the Dependants' Protection Insurance Scheme; and if he will give members the option to increase the insurance cover.

The Minister for Labour (Mr Lee Yock Suan): Mr Speaker, Sir, as at 26th June 1989, 175,000 CPF members have opted out of the CPF Dependants' Protection Insurance Scheme (DPIS), leaving 745,000 members insured under the scheme.

The DPIS is intended to be a social security scheme to provide a minimum level of insurance cover for CPF members against the risk of permanent incapacity or premature death before the age of 55. Hence, the insured sum has been kept low at $30,000, equivalent to about three years' earnings of an average worker. The scheme is also kept simple to minimize the administrative cost to the insured members.

Members who wish to have a higher level of insurance cover or other types of insurance should buy insurance on their own with private insurance companies.

Mr Chng Hee Kok (Tiong Bahru GRC): Sir, is the Minister fully satisfied with the publicity given to the Scheme and that those who have opted out have done so because they have misunderstood the annual premium to be a monthly premium. Have they fully understood that it is meant to be an annual premium?

Mr Lee Yock Suan: Sir, it is possible that some of those who have opted out may have done so out of ignorance. I hope they will reconsider their decision. There have been cases who had opted out but later came back to the Board to be re-insured and we have agreed to take them back. The scheme is basically a good scheme which was supported by all Members of Parliament, including the Non-Constituency Member, Dr Lee Siew-Choh.

I take the point that there has to be better publicity and I hope that Members will also inform their own constituents that the scheme is really for their benefit. It is the cheapest form of insurance available in Singapore and the intention of the Board is to operate it at cost. And if there is any surplus it will be refunded to Members. In fact, even the Life Insurance Association has recommended to the public that they should think carefully before opting out of the scheme.

Mr Chng Hee Kok: Sir, the Minister, of course, is right and the scheme is only cheap if more members are in the scheme. So my question really is, will the Ministry reach out and encourage those who have opted out to come back into the scheme? If more members opt out of the scheme, the premium will rise in time to come.

Mr Lee Yock Suan: Sir, the scheme is still very viable with a base of 745,000 members. Among those who have opted out are a high proportion of females. Maybe they feel there is no need for them to insure themselves. There is also a high proportion of Malays, and a higher proportion of those with low income or low CPF balances and the older ones. We have assessed the scheme and find that it is still viable and the insurance rates will be maintained.