The Policy Owners' Protection Scheme: what SDIC covers if an insurer fails
Singapore's PPF Scheme, run by SDIC, protects policyholders automatically if a licensed insurer collapses. Here is what it guarantees, where the caps sit, and what falls outside it.
A life policy is a promise that may not be tested for thirty years. Part of what makes that promise credible is the regulatory capital MAS requires insurers to hold. The other part is a safety net that most policyholders never think about: the Policy Owners' Protection Scheme, usually shortened to the PPF Scheme. This guide explains what it does, how the caps work and where its edges are.
Who runs it and who is in it
The PPF Scheme is administered by the Singapore Deposit Insurance Corporation (SDIC), the same body that runs deposit insurance for bank customers. Membership is not voluntary. Every insurer licensed by MAS to write direct life business or direct general business in Singapore must belong, with narrow exceptions for captive insurers and specialist insurers. The LIA's consumer page makes the point that protection is automatic: you do not apply, pay a separate fee or register your policy. If your insurer is a Scheme member, you are covered from the day the policy starts.
SDIC publishes the list of Scheme members on its website. Checking it takes a minute and is worth doing before you buy from an insurer you have not heard of.
What the life scheme protects
For life insurance, the Scheme protects the guaranteed benefits of a policy in full, subject to caps. MoneySense lists the policy types that fall within scope:
- individual and group term life policies
- individual and group whole life policies
- individual and group endowment policies
- individual and group annuities
- individual and group long-term accident and health policies
Accumulated coupon deposits, premiums paid in advance and unclaimed monies under insured policies are also protected.
Two words in that description carry the weight. "Guaranteed" means the sum assured, guaranteed surrender values and guaranteed cash benefits. Non-guaranteed bonuses on a participating policy, and the unit values of an investment-linked policy, are not what the Scheme is designed to underwrite. "Caps" means there are limits per person, which we come to next.
The caps
The limits apply per life assured, per insurer. The figures MoneySense quotes are:
| Policy type | What is capped | Limit |
|---|---|---|
| Individual life and voluntary group life | Guaranteed sum assured | S$500,000 |
| Individual life and voluntary group life | Guaranteed surrender value | S$100,000 |
| Individual and voluntary group annuities | Aggregate commuted value of guaranteed benefits | S$100,000 |
| Accident and health policies | Claims | Fully compensated, no cap |
"Per life assured per insurer" matters if you hold several policies with the same company. The caps apply to the combined guaranteed benefits across all of them, not to each policy separately. Someone with three whole life policies at one insurer totalling S$800,000 of guaranteed sum assured would be protected up to S$500,000 of it, not S$800,000. Splitting large cover across two insurers is one way to stay within the caps, though it is a consideration to weigh against the convenience and cost of a single relationship, not a rule.
The LIA notes that the life scheme's coverage was raised from 90 per cent of protected liabilities to 100 per cent, subject to those caps, and that accident and health policies were brought into scope. That is why the A&H row above has no ceiling.
General insurance
For general insurance the Scheme is simpler. The LIA describes protection as 100 per cent of the insured policies without caps. Motor, home, travel, personal accident and similar short-term contracts written by a member general insurer are therefore protected in full for claims that arise while the insurer is being resolved.
What is outside the Scheme
- Policies issued by overseas branches of a Singapore-incorporated life insurer are excluded, even though the parent is a member.
- Non-guaranteed benefits. Projected bonuses, dividends and investment-linked unit values are not guaranteed by the insurer in the first place, so the Scheme does not guarantee them either.
- Amounts above the caps for life and annuity policies.
- Insurers that are not members, which in practice means unlicensed operators or foreign insurers you have bought from directly. A licence to sell in Singapore is the gate to membership, so the two checks reinforce each other.
How this fits into your own risk management
The Scheme is a backstop, not a reason to ignore the strength of the company you buy from. In practice, an insurer in difficulty is more likely to be taken over or have its portfolio transferred than to leave policyholders with nothing, and MAS supervises capital precisely to make that the outcome. What the PPF Scheme adds is certainty on the guaranteed core of your cover.
A sensible routine is to confirm SDIC membership when buying, to know roughly where your guaranteed benefits sit relative to the caps, and to keep the non-guaranteed portion of any savings-type policy in perspective when you compare illustrations. If you want to see how your existing cover is spread across insurers, our coverage gap check lists policies side by side.
Talk to an advisor
Whether cover should be concentrated with one insurer or spread across two is a question that depends on the size of your guaranteed benefits and the products involved. A licensed advisor can walk through your current policies against the Scheme's caps. Use the portal's matching to find one, or ask our assistant about any policy you already hold.
Sources
This content is educational information from a licensed advisor, not financial advice. Product details vary by insurer — verify specifics with an advisor.
