At the AFA convention today, there was a speaker from MOH and she shared updates on Careshield Life.
This is an updated blog post with the new information.
Why it is important to have long term care coverage like Careshield life
When you are down with severity disability, you have to depend on someone (aka caregiver) to take care of you. It is usually a spouse, a maid or a family member.
During Singapore National Rally 2016, our Prime Minister Lee Hsien Loong said that one in two persons will have a long-term disability, and will not be able to look after themselves at some point in their lives.
This was reinforced in the convention sharing. 1 in 2 before end of lives is really accurate.
Long Term Care can be costly and prolonged for a long period.
The worry is “Can my finances withstand the continuous draining of my lifelong savings?”
5 Common Questions You May Have!
1. What is Careshield Life?
Imagine this, if you are unable to work due to disability, will your bills still need payments?
Careshield life is help in that aspect.
You can use the plan’s payout to pay for your long term care expenses incurred during your disability.
In the event of severe disability, Careshield Life policyholders will receive $600-$1,200 (projected) monthly cash payout for lifetime depending on when claim occurs.
Why is it a range? It is a 2% escalating amount each year.
Coverage will be for your lifetime and premium will start from age30.
It will replace eldershield from year2020.
2. Is eldershield and Careshield Life collecting too much premium?
Just to recap, Eldershield (its predecessor) coverage is for a lifetime and citizens pay only till age65.
Each claim is up to an amount of $28,800.
While an amount of only $133 million has been paid out by Eldershield from a total premium of $3.3B collected, this does not mean that it is expensive.
Eldershield and now Careshield Life are pretended schemes.
It is probable that more claims are on the way as our population ages.
It only needs 115,000 citizens claiming $28.8k each to exhaust the $3.3B collected assuming everything stops today
In any case, if there are profits, 50% will refunded as surpluses.
3. What is “Severe Disability”?
“Severe disability” is the inability to perform at least three (3) of the six Activities of Daily Living (ADLs).
This can be caused by accident or illnesses like stroke.
4. Is it hard to claim "Severe Disability" on Careshield Life?
There had been more than 12,500 successful claims since Eldershield (its predecessor) was launched in 2002.
On the technicality side, unlike your life insurance coverage of Total and Permanent Disability (TPD) which needs to be fulfilled being totally disabled and permanent in nature, you can receive claim benefits even with temporary disability.
The 3/6 ADL is actually not difficult to claim with certain injuries and illnesses like stroke.
As our population ages and as stroke patients get younger, claims will become more prevalent.
For the actual claims procedure in Careshield Life, cost for first time claims assessment is waived even if the claim is unsuccessful. This is unlike eldershield where a visit to the appointed assessor is $50.
For future assessments, it will include a pool of assessors who are occupational therapists, physiotherapists and nurses.
Assessments by healthcare professionals who are not accredited will also be accepted.
5. What are premiums for Careshield Life?
Premiums for careshield life are also using your CPF Medisave account and start when a citizen turns age 30 (male: $206 & female:$253). Females are more expensive.
While premiums are going to be higher than eldershield by about 50%, its coverage is potentially quite a few times more to you.
Careshield Life will be payable till age67 after which you fully own it.
If entry age is 58 and above, premiums will be payable for 10years.
There will be subsidies for careshield life based on means testing.
Premiums increase with entry age and escalate.
The best way to find out is to directly use the calculator by MOH.
Should you switch from eldershield to Careshield Life
If you are age30-40 next year 2020 , you'd be universally included (cannot opt out) into Careshield Life.
Those that are in eldershield already, you have a decision to make on switching to careshield life in 2021 only.
Below is a summary table of participation incentives from this link
If you switch over from eldershield 400, you'd need only to pay for careshield life premiums.
If you are on eldershield 300 or do not have eldershield, then there will be a "catch-up" premium component.
Image link: https://www.moh.gov.sg/careshieldlife/about-careshield-life/premiums-and-premium-support
It depends on which eldershield and whether you've opted out before on eldershield to know your "Catch-up premiums".
Now that you know it's importance and how it works, is Careshield Life sufficient to meet your needs?
Quick answer is NO.
While covering $600/month in Careshield Life is better than having $400/month, you should still seek to upgrade your long term care coverage.
This was reinforced by the presentation where $2,000-$3,000 on an average of 4years and in 30% more than 10years was needed.
Based on Aviva’s Long Term Care Study in 2011, claimants on average require $2,150 per month to employ a caregiver (domestic helper) or to admit into a nursing home.
Medical treatment or speech therapy occupational therapy and physiotherapy may also require, improving your chance of recovery.
On top of this necessities, you may need to buy/rent mobility aids such as wheel chair and not forgetting you have to pay for daily expenses and utility bills.
Other Common Questions!!!
1) Is it better to remain with eldershield than change to Careshield Life?
The 2 plans have different premium and benefits structure. Careshield life cost more but covers significantly more.
In my opinion, the Careshield Life is a superior coverage and more suitable to today's long term care needs.
2) Why is there NO Careshield Life premium table?
Below is an old ESTIMATED table.
The actual premiums depend on entry age, gender, subsidies, escalation, catch-up component etc...
Best to use the actual calculator.
3) What is the maximum entry age for Careshield Life?
There is no maximum entry age for careshield life.
If you are an elderly but not suffering from any loss of ADL (activities of daily living), you can join careshield life.
Government will be making further changes and in future, up to $200/month can be withdrawn in cash from medisave if a person is disabled.
I imagine that in future with more analytics, medical definition and some bio-stats can be tied to rehab potential of a claimant. The need for RE-assessment for a claimant can be further simplified.