For each outstanding policy year, penalties capped at 17% may be imposed on the unpaid premiums.
A penalty of 5% may be imposed on the premiums that remain unpaid after the active premium payment measures taken by the CPF Board. If these premiums are still not paid one year after the 5% penalty was imposed, a further penalty of 12% may be imposed on the unpaid premiums.
Compounded annual interest of 4% may continue to be imposed on the unpaid premiums and/or interest so long as the MediShield Life premiums remain outstanding.
A Demand Note (DN) will be issued to notify you of the penalties and interest amount that may be imposed if the outstanding premiums are not paid in full by the payment due date in the DN.
(i) Illustration for computation of Penalty and Interest, with no payment received: Policy renewal date: 1 February 2018
| Date of Event | Description of Event | Amount | Total Premium, Penalty and/or Interest payable |
| 1 Feb 2018 | Policy Renewal Date - Premium for Policy Year 2018 due for payment | $1,000.00 | $1,000.00 |
| 1 Apr 2018 | Demand Note served to notify of 5% penalty amount of $50.00 (i.e. 5% x $1,000) that may be imposed on the premium if full payment is not received by the due date - 22 Apr 2018. | - | $1,000.00 |
| 23 Apr 2018 | Add: 5% penalty for Policy Year 2018 | $50.00 | $1,050.00 |
| 1 Feb 2019 | Premium still remains unpaid after 1 policy year. Demand Note served to notify of the 4% interest that may be imposed on the premium that remains unpaid after the due date - 22 Feb 2019. | - | $1,050.00 |
| 23 Feb 2019 | Add: Interest compounded on premium for Policy Year 2018 that remains unpaid (i.e. 4% x $1,000) | $40.00 | $1,090.00 |
| 23 Apr 2019 | Premium still remains unpaid 1 year after the 5% penalty was imposed. Demand Note issued to notify of 12% penalty amount of $120 (i.e. 12% x $1,000) that may be imposed on the unpaid premium if full payment is not received by the due date - 14 May 2019. | - | $1,090.00 |
| 15 May 2019 | Add: 12% penalty for Policy Year 2018 | $120.00 | $1,210.00 |
Note: Interest will continue to compound on the premium and interest that remain unpaid after each policy year.
(ii) Illustration
for computation of Penalty and Interest, with partial payment received: Policy
renewal date: 1 February 2018
| Date of Event | Description of Event | Amount | Total Premium, Penalty and/or Interest payable |
| 1 Feb 2018 | Policy Renewal Date - Premium for Policy Year 2018 due for payment | $1,000.00 | $1,000.00 |
| 1 Apr 2018 | Demand Note served to notify of 5% penalty amount of $50.00 (i.e. 5% x $1,000) that may be imposed on the premium if full payment is not received by the due date - 22 Apr 2018. | - | $1,000.00 |
| 10 Apr 2018 | Less: Payment received
- Offset against unpaid premium of $1,000 | ($500.00) | $500.00 |
| 23 Apr 2018 | Add: 5% penalty for Policy Year 2018 | $50.00 | $550.00 |
| 1 Feb 2019 | Premium still remains unpaid after 1 policy year. Demand Note served to notify of the 4% interest that may be imposed on the premium that remains unpaid after the due date - 22 Feb 2019. | - | $550.00 |
| 20 Feb 2019 | Less: Payment received
- Offset against unpaid penalty of $50 | ($40.00) | $510.00 |
| 23 Feb 2019 | Add: Interest compounded on premium for Policy Year 2018 that remains unpaid (i.e. 4% x $500) | $20.00 | $530.00 |
| 20 Mar 2019 | Less: Payment received
- Offset against unpaid penalty of $10, followed by unpaid interest of $20 | ($25.00) | $505.00 |
| 23 Apr 2019 | Premium still remains unpaid 1 year after the 5% penalty was imposed. Demand Note issued to notify of 12% penalty amount of $60 (i.e. 12% x $500) that may be imposed on the unpaid premium if full payment is not received by the due date - 14 May 2019. | - | $505.00 |
| 15 May 2019 | Add: 12% penalty for Policy Year 2018 | $60.00 | $565.00 |
Note: Interest will continue to compound on the premium and interest that remain unpaid after each policy year.