An account that can only login on the local ptys is a good enough backup plan.
The disk encryption doesn't buy you much in such an environment, though... Even with whole disk encryption if you're running virtualized; then your provider can just read your VM's memory anyway...
Unless your VPS is going to be forever shutdown, disk encryption under a hypervisor you don't control seems reasonably pointless -- I only use it for physical security to stop people being able to use disks they yank from physical boxes -- even then if they were motivated enough they could probably grab the memory from the server(s) and get the keys anyhow...
AFAIK, there is no possible protection from this besides running your own gear. There were recently published attacks where someone managed to pull keys from other machines by abusing some either intel or vmware's memory dedupe tech bugs iirc (don't have the link handy) -- so; it's not even limited to what your provider may be doing...
The disk encryption doesn't buy you much in such an environment, though... Even with whole disk encryption if you're running virtualized; then your provider can just read your VM's memory anyway...
Unless your VPS is going to be forever shutdown, disk encryption under a hypervisor you don't control seems reasonably pointless -- I only use it for physical security to stop people being able to use disks they yank from physical boxes -- even then if they were motivated enough they could probably grab the memory from the server(s) and get the keys anyhow...
AFAIK, there is no possible protection from this besides running your own gear. There were recently published attacks where someone managed to pull keys from other machines by abusing some either intel or vmware's memory dedupe tech bugs iirc (don't have the link handy) -- so; it's not even limited to what your provider may be doing...