The ElderShield severe disability insurance program was launched in 2002 by the Ministry of Health (MOH).
If you are a Singapore Citizen or a Permanent Resident (PR), you will be automatically enrolled in the scheme after you reach the age of 40. Around 3 months before your 40th birthday, you’ll receive a letter notifying you about the scheme.
The Ministry of Health has contracted three insurance providers to aid in the ElderShield scheme. These are:
- NTUC Income
- Great Eastern
- Singlife with Aviva
You will be assigned to one of these three insurance providers at random, but you will have the opportunity to switch providers after you receive your welcome package.
It is always important to distinguish ElderShield from MediShield Life, and as well as from the Integrated Shield Plan. Take note that these are different health schemes. The latter is intended to provide medical insurance coverage to be able to cover both inpatient and outpatient expenditures without the need to use out-of-pocket-money.
So, What Exactly Does Eldershield Cover?
According to MOH, there are six basic daily activities (ADLs) which are as follows:
You will receive a payout on a monthly basis if you are unable to complete three of the six ADLs listed above, with or without the use of a mobility device, as certified by an accredited assessor.
How Much Payout Are You Entitled To Receive?
This depends on whether you have an ElderShield 300 or an ElderShield 400.
You should be covered by ElderShield 400 if you reached 40 and joined after September 2007. On the other hand, if you joined the scheme earlier than the said date, then you should be covered by ElderShield 300.
Since the first ElderShield scheme was launched in 2002, those who reached 40 before that specific time may not be covered at all. For this, it’s important to verify your CPF status online.
Once you’ve reached 40 and got automatically enrolled in the scheme, you’re expected to begin making annual payments into your CPF Medisave account. For men, this premium is $174.96 and for women, it’s $217.76. You can make these payments until you turn 65, and after that, you’ll be covered for life without having to spend another dime.
If you previously opted out of ElderShield or do not already have an ElderShield policy but would like to enroll again, your premiums will be calculated based on your entry age.
Some members of your family may also be able to assist you in meeting the cost of these premiums. They could be your spouse, children, parents, or even your grandchildren.
Is the ElderShield Basic Plan Enough?
ElderShield is a financial safety net for those who are rendered seriously incapacitated and unable to work. It covers long-term care expenses, such as those incurred by employing a housekeeper or staying in a nursing home.
There’s no doubt that you’d need help from others in the event that you become severely disabled and unable to work. It could be a member of your family, but wouldn’t it be a hassle for them because they also have other priorities? For most of us, we would rather have someone else pay for our care than put further strain on our other families.
Looking at the deeper problem, do you think it’s adequate if Basic ElderShield only pays out $400 a month for a mere 6 years?
According to an article published in the Singapore Business Review in 2020, the disability costs have risen to become one of the top concerns of Singaporeans. While in a separate Aviva survey, it revealed that the cost of long-term care would amount to $2,324, covering the daily expenses, caregiving costs, medication, and therapy.
Also, the average lifespan of a Singaporean has been rising steadily over the past few decades. According to Statista (2023), men can expect to live an average of 81.5 years, while women can expect to live an average of 86.1 years. This means that the necessity for care is rising along with the increasing population size.
Upgrading ElderShield
Thanks to the ElderShield reform in 2007, you can now enhance your ElderShield supplements and increase your benefits.
Among the many advantages of upgrading your ElderShield are the following:
The 7 Advantages of Upgrading Your ElderShield Earlier
1. Greater Monthly Payout
You can choose a larger payout amount each month instead of just having the basic $400 or $300.
While the maximum monthly payment may vary from provider to provider, Singlife by Aviva recently limits payments at $5,000.
In the event that you require professional care, you will be able to take use of high-quality care facilities with the increased monthly payout.
2. Lifetime Benefits
In lieu of a limited payout period of 5 or 6 years, you can get payouts throughout the rest of your life.
The lifetime payment assures that essential care may be provided for a lifetime, which is especially important considering that serious disabilities may be permanent and arise over an extended period of time.
Because of this, you won’t have to bother your loved ones.
3.Ease of Filing Claims
Not being able to do three out of six ADLs is all it takes to qualify for benefits under ElderShield’s basic plan.
Some people might prefer simpler requirements for filing a claim in case the worst happens.
This is why supplemental plans that come in after failing 2 out of 6 ADLs are so useful.
4. Maximized Use of Your CPF Medisave
You can utilize your CPF Medisave (up to a maximum of $600 per year) to cover the cost of the premium upgrades. If you desire a larger monthly payment, you may need to top up with cash.
Most people would use their Medisave funds only to cover their premiums at the very least.
In addition, your CPF Medisave amount will earn 4% interest per year.
For instance, If you have $40,000 in your Medisave account, you will receive $1,600 in interest per year. The interest earned would be enough to cover the premiums even if the policyholder had stopped working.
Unfortunately, there are currently restrictions on how you can spend your CPF Medisave funds which are: (1) You cannot take money out of your Medisave account because it is not part of your CPF retirement funds. (2) Your beneficiaries will only be able to access your Medisave funds after your death. (3) You can only use your Medisave for particular things, like paying for medical bills (within certain restrictions) or contributing to your MediShield Life or ElderShield coverage.
The Medisave could be used to supplement your ElderShield insurance, providing you with more comprehensive protection.
5. Increased benefits and lower costs for coverage
In contrast to the rising costs associated with hospitalization premium plans, ElderShield premiums remain constant regardless of the insured’s age.
If you start paying for the premiums earlier, you can enjoy the same monthly benefit for a lower cost.
However, if you plan to use the maximum $600 per year from your Medisave, the monthly benefit amount will be greater if you make the change now rather than later.
6. Flexible payment
Payment is made on a periodic basis, just like with hospitalization plans.
The premium increase for ElderShield is considered intangible and hence canceling the policy does not result in any penalties (other than the loss of any accrued but unused premiums).
This allows you to stop the upgrade if, let’s say, three to four years down the road, you find yourself in financial difficulty and can no longer afford the upgraded premiums. Nevertheless, remember that without payment, you won’t be able to enjoy the benefits it offers.
7. Make the Most of Your Healthy Condition
Insurance businesses care greatly about your current health standing.
It may be difficult to participate in the scheme if you are currently experiencing any illnesses or disorders.
High blood pressure (HBP) and other preexisting conditions may or may not be covered, depending on their severity. Coverage is frequently declined for people who have Diabetes.
Why take the risk for your health to worsen and make it more difficult to qualify for better coverage down the road?
Conclusion
Why not consider upgrading if you have excess CPF Medisave?
If you use your Medisave account, you can get all the perks we just listed without having to shell out any of your own money.
Keep in mind that the underwriting procedure for an ElderShield upgrade will include an assessment of your current health state.
As a starting step, you should upgrade your ElderShield to protect yourself from any financial worries.