The Ministry of Health (MOH) stated in May 2018 that CareShield Life, a national long-term care insurance program, will replace the current ElderShield scheme on October 1, 2020, for people born in 1980 or later. CareShield Life will make an effort to better assure and safeguard Singaporeans against the high costs of long-term care in the case of a severe disability.
How does CareShield Life work?
CareShield Life, like the previous scheme, intends to assist Singapore Citizens and Permanent Residents (PR) in meeting their personal and medical expenditures associated with severe disability. However, there are significant distinctions between ElderShield and CareShield Life in terms of premiums, payment durations, and eligibility, which we shall cover in more detail later.
When Careshield Life was launched on October 1, 2020, All Singaporeans born between 1980 and 1990 were automatically enrolled in the new scheme or, upon reaching 30, whichever came first. CareShield Life requires all members to be covered, regardless of their health or the presence of any pre-existing diseases or impairments.
Those born in 1979 or earlier can opt to join CareShield Life as long as they are not seriously disabled. From December 2021 onwards, the ElderShield 400 plan will automatically include CareShield Life coverage for those insured members born between 1970 and 1979 who do not have a severe disability. You have until December 31, 2023, to withdraw from the plan if you want.
We’re here to help those born in 1979 or earlier differentiate between the two plans so you can choose the one that best suits your needs.
How Does CareShield Life Differ From ElderShield?
Now that you know what CareShield Life entails, it’s time to compare it to ElderShield and see how the two policies differ.
Some key distinctions are as follows:
Lifetime Payouts
One significant distinction between the two choices is the availability of lifetime disability payments. In the event of a severe disability, CareShield Life provides lifetime cash payouts, giving you peace of mind that you will be taken care of financially for the rest of your life. Even if you cannot pay your CareShield Life premiums because of financial hardship, the policy will still cover you. This is only applicable to individuals qualified for Additional Premium Help who, even with premium subsidies and any available family support, are still unable to afford insurance premiums.
ElderShield, on the other hand, accepts claims at any age but only pays for up to 5 or 6 years of disability (depending on the specific plan). What if you continue to need substantial medical attention and financial backing later on? You may compromise your ability to pay for healthcare or caring expenses after the Eldershield payment expires unless you have enhanced your coverage.
Increased Annual Payouts
CareShield Life’s monthly payouts will begin at $600 and grow by 2% annually starting from 2020 to 2051. CareShield Life makes sure the payout amount is enough for your changing demands as you become older by increasing it every year.
The ElderShield 400 plan, on the other hand, guarantees a fixed monthly payout of $400 for up to 5 or 6 years in the event of a serious disability.
Annually increasing premiums
Higher premiums could appear to be expensive at first glance. But remember that ElderShield 400 only covers you for up to 72 months, whereas CareShield Life covers you for life in case of a disability.
To offset the effects of inflation, premiums will rise by around 2% annually during the first five years of the scheme’s implementation, from 2020 to 2025. However, the growth rate might shift over time. The government of Singapore has formed a separate Council to keep an eye on the market and change premiums as necessary.
Premium subsidies and incentives
Even if paying more for insurance means you’ll be better protected, the thought might be discouraging. Therefore, premium subsidies and other incentives were made available to Singapore citizens. Age-eligible policyholders (born in 1979 or earlier) who enroll in CareShield Life before December 31, 2023, are eligible for a participation bonus of up to $2,500, paid out throughout the first decade of their coverage. Seniors of the Merdeka Generation and the Pioneer Generation who sign up for CareShield Life by December 31, 2023, will get a $1,500 participation bonus in addition to the standard $2,500 incentive.
Premium subsidies may also be available for families of low-middle earners. You may qualify for a discount of up to 30% off the basic premium based on factors such as your per capita monthly income (PCHI), the annual value of your home, the number of properties you own, and your citizenship status.
Should you shift to CareShield Life?
Even though CareShield Life offers several notable advantages over ElderShield’s current coverage, the decision to make the shift ultimately rests with you and your particular needs.
Consider shifting to CareShield Life if you’re seeking long-term care insurance that includes essential financial assistance for a lifetime should any unexpected events happen. The good thing about it is that CareShield Life payments will be automatically withdrawn from your MediSave if it has adequate funds, so you won’t have to worry about how you’ll pay for the further protection it offers.
You may shift to Careshield Life whenever you choose, but if you want to save money, do it while you’re younger. Also, seniors (65 and up) interested in changing their scheme should decide no later than December 31, 2023, to qualify for the participation incentives.
What happens to people who supplemented their ElderShield coverage with a separate insurance policy? If you become severely disabled, you may be eligible for a higher monthly payout and additional benefits, depending on your plan. Check your policy’s payment information to see whether moving to CareShield Life might allow you to save money over the long haul for lower premiums.
Enhance CareShield Life's coverage to prevent gaps in protection
The inability to perform three or more of the six ADLs (Activities of Daily Living) is a significant qualifying criterion for Careshield Life payouts. However, Careshield Life will not provide benefits to anyone unable to execute two of the six ADLs. Thankfully, Careshield Life Supplement Plans, such as Great Careshield Life, offer expanded coverage to bridge these gaps.
Suppose you become disabled and cannot carry out two or more ADLs. In that case, Careshield Life supplements provide supplemental lifetime coverage in the form of monthly disability benefits of up to $5000. Depending on the type of plan, it also provides a variety of additional advantages, such as a dependent benefit, a death benefit, and a support benefit. Because of this, you may focus on getting better, knowing that your most fundamental requirements for long-term care are covered. Most importantly, Careshield life supplements can be fully paid with Medisave (up to $600 annually per covered individual),
There is nothing one can do to ensure a secure life. Nonetheless, you may plan for events that are out of your hands. You may rest easy and focus on what you can control by making sure you and your loved ones are financially prepared for the unexpected by purchasing enough insurance coverage for yourself and your family.