At Bandboo, we pride ourselves in enabling the lowest possible cost of insurance through a 100% unconditional rebate of unused premiums. As the premium is $35 a month, we are often asked how much our unemployment insurance will actually cost after the rebate.
In this blogpost, let us provide a quick and simple analysis based on the past ten years. This ten-year period includes the Global Financial Crisis, during which Singapore’s resident unemployment rate rose from 3.2% in 2008 to 4.3% in 2009.
Two key pieces of data are needed for our analysis:
Redundancy refers to people who either have been retrenched or released from their work contracts prematurely. Median gross monthly income gives us a sense of how much the average person in Singapore earns, inclusive of employee’s CPF contribution but excluding the employer’s portion.
At Bandboo, you receive a payout comprising three months of your salary (capped at $18,000) when you experience an involuntary loss of job, such as through retrenchment. In our analysis here, we assume that everyone who has been retrenched remains unemployed for three months and hence claims the full three-month salary payout.
The monthly premium can be calculated with the simple formula below:
(Redundancy incidence per 1000 members x Median gross monthly income x 3 months of payout) ÷ 1000 members ÷ 12 months of premium payment
An overview of the monthly premium required based on this simple formula is presented here:
Year |
Actual monthly premium paid |
2007 |
$3.50 |
2008 |
$6.86 |
2009 |
$9.23 |
2010 |
$3.86 |
2011 |
$4.02 |
2012 |
$4.35 |
2013 |
$4.71 |
2014 |
$5.16 |
2015 |
$6.41 |
2016 |
$7.79 |
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