With 1 out of 2 Singaporeans aged 65 and above ending up with total and permanent disability (TPD), getting yourself covered with life insurance becomes almost logical. However, TPD payouts are typically for large, expensive payments such as your mortgage.
What happens when the life insurance payouts slowly dwindle and you don’t have any other income to get you through your daily long-term care needs?
Luckily for you, the Singapore government has passed a bill where all Singaporeans and Permanent Residents (PRs) enjoy disability coverage with monthly payouts where your long-term care costs are met.
This disability insurance scheme is called Careshield Life.
What is Careshield Life?
Have you heard of the ElderShield Scheme? If yes, you already know what Careshield Life is. It is simply the latest upgrade of ElderShield. Of course, it has some additional features and updated policies, all of which we will discuss down below.
Click here for an in-depth comparison between ElderShield and Careshield.
In a nutshell, Careshield Life is a national long-term insurance scheme. It was launched on 1st October 2020 to provide necessary financial support in the event Singapore citizens or permanent residents become severely disabled, especially during old age, and need personal and medical care for a prolonged period.
When life becomes difficult, a financial problem is the last thing that you may want to meet. This is precisely where Careshield Life walks in to save the day!
With this, you have the option to make premium payments using your MediSave till the age of 67 — more on what you’re covered later.
Who is eligible for Careshield Life?
There are 4 categories of people who are affected by Careshield Life:
Singaporeans born after 1990
Will be automatically enrolled upon 30th birthday regardless of any pre-existing disability. Singaporeans and PRs will receive a letter regarding their amount payable 2 months before their 30th birthday.
Singaporeans born between 1980 and 1990
You will be automatically covered on 1st October or on your 30th birthday, whichever is later. If you are under this category, regardless of whether you have any pre-existing disabilities, you will automatically receive coverage.
Singaporeans and PRs will have received their letter by November 2020, after which you can start paying your premium payments.
Singaporeans above 40
Singaporeans aged between 41 and 50 in 2020, under ElderShield 400, will automatically come under the Careshield Life policy by the end of 2021 if they have no severe disability.
However, you also have the choice to opt-out from Careshield Life by 31st December 2023.
On the other hand, Singaporeans or Permanent Residents aged 41 and above (no age limit) can apply for Careshield Life on the condition that you are not severely disabled. If you fall under this category, note that participation is optional.
What coverage does Careshield Life provide?
As you already know, Careshield Life provides long-term coverage in events for severe disabilities the moment you start making premium payments. This will be till the age of 67.
So let’s look into what exactly it means by ‘severe disability.’
A person comes under the ‘severely disabled’ category if they cannot perform 3 out of the 6 activities of daily living (ADLs). So, what are the 6 ADLs? These include:
- Washing: Ability to bathe or shower on their own
- Feeding: Ability to feed oneself
- Mobility: Ability to walk, stand, sit, or move from one place to another by yourself
- Dressing: Ability to manage self appearance from choosing your clothes to putting them on
- Toileting: Ability to get in and out of the toilet on your own. It also includes using the toilet properly, cleaning oneself, and putting on undergarments without any assistance
- Transferring: This is similar to the mobility criterion and can be used interchangeably. It includes the ability to get yourself up from the bed and move to a chair and other similar situations
If you cannot perform any of the 3 or more activities of daily living mentioned above, you are eligible to receive the cash payout of a minimum of $600 per month. This amount is projected to increase yearly by 2% until 2025, with further reviews for any increase in premiums after.
However, if you make claims between 30 and 67, the insurers will adjust your monthly payouts accordingly. So instead of starting the first payout at $600 monthly, this will be adjusted according to how old you are when making these claims.
Once you start receiving payouts, it will not increase and will remain fixed according to the age you first made your claims.
You will receive lifetime payouts if you don’t recover from your condition.
Why do we need CareShield Life?
It is expected that 1 out of every 2 healthy Singapore citizens aged 65 and above could become severely disabled. This means they are most likely to need long-term care. Above all, you are sure to need some financial assistance if you ever face such health issues.
According to a survey conducted by the Mercer Marsh Benefits, the cost of Singapore’s medical fees inflated by 10% in 2018 alone.
The data reveals that medical expenditure is far from being cheap. Hence, Careshield Life comes in handy to help pay off your living expenses.
How much are Careshield Life Premiums?
Careshield Life premiums will vary between males and females. For females, the starting annual premiums are $254 and $206 for males. This base premium will further increase by 2% every year from 2020-2025.
After 2025, the independent Careshield Life Council will handle all premium adjustments. Additionally, you can also use the Premium Calculator to get an estimate after any government premium subsidies and/or any transitional subsidy.
Under Careshield Life, the premium payable starts from the year of joining until you reach your 67th birthday. After this, you can enjoy lifetime cash benefits in events of any severe disabilities.
However, if you are severely disabled at the age of 30, you can still qualify for cash benefits as long as you remain under the definition of severely disabled. Premium payments also stop when you successfully make a claim and will continue when you recover.
You can pay your Careshield Life premium through your or any of your family member’s MediSave account. In case of insufficient funds, you can recharge your MediSave account with cash.
Does Careshield have Premium Subsidies?
Singapore citizens will receive up to $250 worth of subsidies over the first 5 years of enrolling in the scheme. Depending on your monthly per capita household income, you may also qualify for additional premium subsidies.
Monthly Per Capita Household Income
$1,100 or less
$1,101 – $1,800
$1,801 – $2,600
How to join Careshield Life?
All Singaporeans born in 1980 and after automatically come under Careshield Life from October 2020.
For persons born in 1979 or earlier, you can join Careshield Life by the end of 2021, provided that you are not severely disabled.
If you are in the age group of 41 and 50 and covered by ElderShield 400, you will automatically come under the Careshield Life by December 2021. However, if you want, you can opt-out of the Careshield Life scheme by December 2023.
Careshield Life Supplements
Careshield Life Supplements are additional plans by private insurers that you can purchase to gain more coverage. This helps prepare oneself to pay for any unforeseen out-of-pocket expenses that your basic Careshield Life plan doesn’t cover.
Currently, persons between ages 30 and 40 (born between 1980 and 1990) under the basic Careshield Life scheme are the only ones eligible for the Careshield Life Supplements.
There are presently 3 insurers that provide Careshield Life Supplement plans. Let’s take a brief look at all 3 of them.
Under this, there are 2 supplement plans – GREAT CareShield Enhanced and GREAT CareShield Advantage. Under these plans, you can receive monthly payouts of up to $5,000 on the condition that you cannot perform 2 out of the 6 ADLs.
Furthermore, you also receive a lump sum amount of thrice your monthly benefit under the GREAT CareShield Advantage. You can apply for this when you fail to perform 1 out of the 6 ADLs.
Under Aviva, you have the MyLongTermCare and MyLongTermCare Plus plans. By purchasing these plans, you may receive monthly payouts between $200 and $5000 along with your basic Careshield Life payouts.
You also have the choice to receive a fixed or an increasing monthly payout until the premium term ends or your first claim. But remember, if you chose the increasing payout option, your premiums would also increase each year.
Additionally, under the MyLongTermCare Plus plan, you may receive an amount of thrice your first monthly benefit, on the condition that you cannot perform 2 out of 6 ADLs.
With NTUC Income’s Care Secure plan, you can get a monthly payout of around $1,200 – $5,000 whenever a person cannot perform 2 out of 6 ADLs. This monthly payout comes in increments of $100.
Not only that, but you also receive death benefits and other disability benefits.
Do I need the Careshield Life Supplements?
Yes, if you think the starting cash payout of $600 per month is not sufficient to support you and your family, it is best if you opt for the Careshield Life Supplements.
The basic Careshield Life policy requires a person to have at least 3 inabilities from the 6 ADLs.
However, sometimes, you may meet 2 of the ADL conditions that will cause you much financial strain, yet you can’t make a successful claim from just CareShield Life. This is where the supplements come in handy for policyholders.
Besides, they also provide additional benefits like death benefits, discounts, lump-sum payouts, etc. Not only that, but they help in reducing risk factors.
Do note that you need to be prepared to make payment for additional premiums monthly with all these supplements. Talk to a financial advisor if you’re unsure of any details.
If you are still here with us, we hope you have a better comprehension of Careshield Life.
Planning on insurance and keeping monthly checks can seem taxing. However, all the work will pay off when you’re on your worst days.
Careshield Life is not only beneficial for your old age. By now, you would already know that if you meet the severely disabled criterion, you are secured with months worth of cash payouts even where you’re in your 30s, as long as you make your first premium payment.
The decision you have to make is to decide whether you should stick to Eldershield and get any supplements. For scenarios like these, it’s best to speak to a financial advisor to analyse your situation better.