If the premium payment is not received or received late, a 5% late payment penalty will be imposed on premiums that remain outstanding after the active premium payment measures taken by CPF Board.
Additional penalties of 12% will be imposed if the premiums and any interest and late payment penalties imposed remain outstanding one year after the imposition of the 5% late payment penalty. Annual compounding interest of 4% will also be applied on the outstanding premiums and/or interest of those who persistently delay the payment of premiums to make up for the interest loss to the MediShield Life Fund.
A Demand Note (DN) will be issued to notify you of the late payment penalties and interest amount that will be imposed if the outstanding premiums are not paid in full before the payment due date in the DN.
(i) Illustration for computation of Late Payment Penalty and Interest, with no payment received: Policy renewal date: 1 February 2019
| Date of Event | Description of Event | Amount | Total Premium, Penalty and/or Interest payable |
| 1 Feb 2019 | Policy Renewal Date - Premium for Policy Year 2019 due for payment | $1,000.00 | $1,000.00 |
| 1 Apr 2019 | Demand Note served to notify of 5% late payment penalty amount of $50.00 (i.e. 5% x $1,000) that will be imposed on the premium if full payment is not received before the due date - 22 Apr 2019. | - | $1,000.00 |
| 23 Apr 2019 | Add: 5% late payment penalty for Policy Year 2019 | $50.00 | $1,050.00 |
| 1 Feb 2020 | Premium still remains outstanding after 1 policy year. Demand Note served to notify of the 4% interest that will be imposed on the premium that remains outstanding after the due date - 22 Feb 2020. | - | $1,050.00 |
| 23 Feb 2020 | Add: Interest compounded on premium for Policy Year 2019 that remains outstanding (i.e. 4% x $1,000) | $40.00 | $1,090.00 |
| 23 Apr 2020 | Premium still remains outstanding 1 year after the 5% late payment penalty was imposed. Demand Note issued to notify of 12% late payment penalty amount of $120 (i.e. 12% x $1,000) that will be imposed on the outstanding premium if full payment is not received before the due date - 14 May 2020. | - | $1,090.00 |
| 15 May 2020 | Add: 12% late payment penalty for Policy Year 2019 | $120.00 | $1,210.00 |
Note: Interest will continue to compound on the premium and interest that remain outstanding after each policy year.
(ii) Illustration
for computation of Late Payment Penalty and Interest, with partial payment received: Policy
renewal date: 1 February 2019
| Date of Event | Description of Event | Amount | Total Premium, Penalty and/or Interest payable |
| 1 Feb 2019 | Policy Renewal Date - Premium for Policy Year 2019 due for payment | $1,000.00 | $1,000.00 |
| 1 Apr 2019 | Demand Note served to notify of 5% late payment penalty of $50.00 (i.e. 5% x $1,000) that will be imposed on the premium if full payment is not received before the due date on 22 Apr 2019. | - | $1,000.00 |
| 10 Apr 2019 | Less: Payment received - Offset against outstanding premium of $1,000 | ($500.00) | $500.00 |
| 23 Apr 2019 | Add: 5% late payment penalty for Policy Year 2019 | $50.00 | $550.00 |
| 1 Feb 2020 | Premium still remains outstanding after 1 policy year. | - | $550.00 |
| Demand Note served to notify of the 4% interest that will be imposed on the premium that remains outstanding after the due date on 22 Feb 2020. |
| 20 Feb 2020 | Less: Payment received - Offset against outstanding late payment penalty of $50 | ($40.00) | $510.00 |
| 23 Feb 2020 | Add: Interest compounded on premium for Policy Year 2019 that remains outstanding (i.e. 4% x $500) | $20.00 | $530.00 |
| 20 Mar 2020 | Less: Payment received - Offset against outstanding late payment penalty of $10, followed by outstanding interest of $20 | ($25.00) | $505.00 |
| 23 Apr 2020 | Premium still remains outstanding 1 year after the 5% late payment penalty was imposed. | - | $505.00 |
| Demand Note issued to notify of 12% late payment penalty amount of $60 (i.e. 12% x $500) that will be imposed on the outstanding premium if full payment is not received before the due date on 14 May 2020. |
| 15 May 2020 | Add: 12% late payment penalty for Policy Year 2019 | $60.00 | $565.00 |
Note: Interest will continue to compound on the premium and interest that remain outstanding after each policy year.