CareShield Life was introduced two years ago, and is now mandatory for all adults aged 30–40 years old. However, the CareShield Life team has recently sent out letters to anyone over the age of 40 to notify them of the option to switch from ElderShield to CareShield Life.
If you are a Singaporean or Permanent Resident born before 1979 and have an ElderShield, you may be wondering if it’s worthwhile to switch to CareShield Life. If you’re torn between two options and need some guidance, this article is for you.
As one might assume, CareShield Life’s benefits may sound very appealing for anyone to shift from ElderShield to CareShield Life:
CareShield Life vs. ElderShield
This is why it’s important for partners to have an in-depth conversation regarding long term care. Assess your current household expenditures and consider this scenario: If one of you were to quit contributing your income, then you would eventually be facing difficulties because your emergency funds can only last us up to a year of spending.
So now take time to review your insurances and make sure that the basics (health, life, critical illness) are covered. Long-term disability insurance is something that needs to be discussed well with your partner.
Did You Know?
What is ElderShield?
In 2002, ElderShield 300 was established as mandatory long-term care insurance for all citizens and permanent residents of Singapore (PRs). Disability payments were increased and extended with the launch of ElderShield 400 in 2007.
How much do we really know about CareShield Life?
CareShield Life is an enhancement on current ElderShield policies and a mandatory national insurance scheme. As a form of long-term care insurance, its primary goal is to guarantee all Singaporeans some level of financial security in the event of a serious disability.
All Singaporeans and PRs who were born in 1980 or later are required to enroll in CareShield Life. When CareShield Life launches in 2021, Singaporeans and PRs born in 1979 or earlier will have the option to switch to it.
Let’s take a look at what we know regarding CareShield Life so far. Here’s a rundown of the key details about Careshield Life:
- If we’re unable to do three of the six activities of daily living ADLs, CareShield Life will start sending us payouts every month (perhaps forever)
- The predicted net present value of someone covered by CareShield Life from the age of 30 based on the factors affecting the probability of someone being disabled and the length of the payouts, we realize that CareShield Life is an actuarially fair insurance contract that even leaves some value on the table for the insured.
- Additionally, the premium structure of CareShield Life is perfectly suited to our life cycle, with lower premiums in our younger, lower-earning years and higher premiums in our later, higher-earning years, with no further premium payments required beyond age 67(once we retire).
- Because most people don’t become disabled until later in life, in their 70s for example, the structure of CareShield Life payouts also grows over time (until we file a successful claim), which helps to maintain the value of the payouts constant against inflation.
What's the difference between CareShield Life and ElderShield?
ElderShield and CareShield Life are two different types of disability insurance, with significant differences in monthly disability benefits, payout duration, and policy eligibility.
CareShield Life’s initial disability payment is higher, with a projected monthly payout of $600 in 2020. As a comparison, ElderShield only provides a $300 or $400 monthly benefit. CareShield Life’s initial monthly disability payout is expected to rise by 2% per year until age 67. If you become severely disabled at a later age, you can begin receiving your disability payout at a higher level.
Read more here.
The monthly disability compensation provided by CareShield Life is increased and is guaranteed for life. When compared to ElderShield, the benefits for disability are only paid for up to 60 or 72 months.
Finally, all Singaporeans and PRs, including those with serious preexisting disabilities, are covered by CareShield Life. The CareShield Life program makes insurance available to people who are not eligible for ElderShield due to pre-existing serious disabilities.
Is it a good idea to switch from ElderShield to CareShield Life?
Here are some cases to think about if you’re on the fence about whether or not CareShield Life is the best choice for you.
1. Are you unable to increase your current ElderShield protection?
CareShield Life may be a better option if you wanted to upgrade your current ElderShield coverage but were denied due to pre-existing conditions. In the event of a serious disability, this would ensure that you receive a greater monthly benefit from the onset and continued benefits for the rest of your life.
You can only switch from ElderShield to CareShield Life if your current disability level is not too high.
2. Do you only have the most fundamental coverage, without any ElderShield additions?
CareShield Life may be a good option if you are subscribed to the bare-bones ElderShield plan without any add-ons. This is due to the fact that the monthly disability payment offered by CareShield Life is larger than the monthly disability benefit offered by ElderShield, which is $300 or $400, with the latter being fixed in 2020. CareShield Life also offers a lifetime monthly disability payment, guaranteeing that you will continue to receive benefits for as long as your disability persists.
Please be aware, however, that CareShield Life premium has different rates. While premium subsidies have been set for the first five years (2020-2025), the amount set for years beyond that has yet to be decided.
3.Do you currently take any ElderShield supplements?
Do you already have long-term care insurance or an ElderShield supplement that will increase your monthly disability benefit? If so, maybe you should think twice before making the transition to CareShield Life. This is due to the fact that the new policy’s monthly disability payment can be lower than the one you’d receive under your old insurance.
If you decide to terminate your coverage at any point in the future, keep in mind that you will be required to pay for CareShield Life regardless of whether or not you use it.
In conclusion, we suggest that you consider it. When determining whether to stay with your current provider or look elsewhere, it’s important to weigh a number of aspects, including premium costs and the frequency and length of payouts.
4. Have you been refused membership in ElderShield or given the option to opt out?
Because CareShield Life provides universal coverage, you can sign up for it even if you opted out of ElderShield or were too old to enroll in it in 2002. As long as you’re not yet severely disabled, you will be allowed to opt in.
Premium estimates for CareShield Life are available here for people born in 1979 or before.
We advise you to give CareShield Life serious thought so you can take advantage of its superior protections.