Careshield Life 2020: All You Must Know About Singapore’s New Disability Insurance Plan

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Last Updated on by Tree of Wealth

CareShield Life (终身护保) is a disability insurance scheme for Singaporean residents that will be launched on 1 October 2020.

If you are born 1980 or later, it is compulsory for you. You will be automatically enrolled by 1 October  2020 and will start paying premiums for it.

If you are above 40, you will either be automatically enrolled into it or given a choice to opt in, provided that you are currently not disabled.

So, this new CareShield Life basically concerns all working adults. What is CareShield Life for? Who does it cover? Why is CareShield Life compulsory?

We explain everything about CareShield Life in this article.

What is CareShield Life?

CareShield Life is an improved disability insurance plan that is compulsory for all Singaporean residents 40 years and below. It will be launched in 1 October 2020.

How it works is that in the event of severe disability, CareShield Life provides monthly cash payouts for the rest of your life. CareShield Life premiums are affordable. No one will lose coverage due to inability to pay.

CareShield Life is an improved version of the previous ElderShield plan. To know more about the difference between CareShield and ElderShield, skip to the last section.

Who is covered under CareShield Life?

All residents can receive coverage by CareShield Life, but eligibility conditions vary.

Residents born between 1980 and 1990 (30 to 40 years old in 2020): Automatically covered under CareShield Life. If you’re younger than that, you are automatically covered by CareShield Life when you turn 30.

Residents born between 1970 and 1980, are insured under ElderShield and are currently not severely disabled: Automatically covered by CareShield Life once it gets launched from mid-2021. For this group of people, there is an option to not participate. If you choose to opt out, you can get your premiums refunded.

Residents born earlier than 1970: You can opt to manually join CareShield Life from mid-2021 if you’re not currently severely disabled.

Should you opt in to CareShield Life?

If you have to manually opt into CareShield Life or have a chance to opt out, you might be wondering if paying CareShield Life premiums is worth it.

In other words, what’s the chance of you getting severely disabled?

According to statistics cited by Health Minister Gan Kim Yong, 50% of healthy Singaporeans at 65 years old are expected to become severely disabled at some point.

Being severely disabled means not being able to work all the way until your retirement age. How will you live? Will you become a burden to your family members?

Consider the above statistic along with the fact that Singaporeans are living longer. The average lifespan of Singaporeans in 2040 is projected to be 85.4 years old. It’s also estimated that 3 in 10 remain in severe disability for 10 years or more.

Those are alarming statistics! Will our retirement fund last us for 10 years or more should we become severely disabled? If that day really comes, we would need to have enough for food, utilities, housing loan, daily necessities and medical bills.

The monthly estimated expenditure will increase, yet available income would be next to nothing. In such a scenario, you can imagine that CareShield Life’s lifetime monthly payouts would be a godsend.

Still unconvinced? Let’s consider how much you need to pay in CareShield Life Premiums, then look at possible payout amounts to make a better decision.

CareShield Life Premiums 2020

How much CareShield Life Premiums you pay depends on your age, gender, monthly per capita household income and type of residential property. To get an accurate claim, you can make use of MOH’s premium calculator.

You start paying at age 30, and the amount increases over time until you turn 67 or when you make a claim.

There are various premium subsidies available for you as well. First, you get means-tested premium subsidies of up to 30%. Your per capita household income must be $1,200 or less to qualify for the maximum 30%.

Those born between 1980 or later are entitled to transitional subsidies, which are stacked on means-tested premium subsidies. The amount varies according to age and year.

While older residents born before 1980 don’t have transitional subsidies, the government is offering participation incentives to entice you to join. Depending on your age, you get anything from $500 to $4,000 over 10 years. This amount is used to offset your annual premium payable.

Take note that you can pay CareShield Life premiums with your MediSave account.

CareShield Life premiums for men (2020)

Assuming you’re a male with $2,801 per capita monthly household income. You live in a HDB. How much CareShield Life premiums do you pay?

Year Born in 1990 Born in 1980
Annual premium after subsidies and transitional subsidies Annual premium after subsidies and transitional subsidies
2020 136 225
2021 150 241
2022 164 257
2023 178 273
2024 193 290
2025 227 326

CareShield Life premiums for women (2020)

Assuming you’re a female with $2,801 per capita monthly household income. You live in a HDB. How much CareShield Life premiums do you pay?

Year Born in 1990 Born in 1980
Annual premium after subsidies and transitional subsidies Annual premium after subsidies and transitional subsidies
2020 183 296
2021 198 313
2022 213 330
2023 228 348
2024 244 366
2025 279 404

How much CareShield Life payouts can you get?

After you’ve dutifully paid your premiums to CareShield Life, how much payouts are you looking at if you become severely disabled?

Become severely disabled in Estimated monthly payouts for as long as you remain severely disabled
2020 $600
2021 $612
2022 $624
2023 $637
2024 $649
2025 $662

This amount is not guaranteed as it will be adjusted based on longevity and disability trends. What we know for certain now is that for the first 5 years, monthly payouts from CareShield Life will increase by 2% annually.

If you suffer from the disability for life, you are entitled to lifetime payouts. However, when you recover from the disability, payouts will stop.

No one wishes to become severely disabled. But CareShield Life promises a safety net if it really happens.

Definition of “severely disabled”

The government defines “severely disabled” as the inability to conduct 3 out of 6 activities of daily living (ADL), namely washing, dressing, feeding, toileting, walking or moving around and transferring, such as from a bed to a chair and vice versa. You need to be certified by a MOH-accredited severe disability assessor to facilitate your claim.

Does CareShield Life Cover Pre-Existing Conditions?

Yes, CareShield Life covers pre-existing conditions if you are born in 1980 or later (40 years old and younger in 2020).

You will be automatically enrolled in 1 October 2020 (or when you turn 30) even when you are severely disabled (unable to do 3 out of 6 ADLs). Those who are born earlier than 1980 go by a different set of conditions.

CareShield Life vs ElderShield Life

CareShield Life replaces a previous disability insurance scheme called ElderShield. ElderShield wasn’t compulsory and the premiums are fixed. So why has the government made revisions to the premium term and amounts? Why is it compulsory to join CareShield Life for younger Singaporeans?

Read More Here: Careshield Vs Eldershield- Should You Opt In? Differences in Premiums & Payouts

This is because Singaporeans are living much longer than before. Plus, the risk of becoming severely disabled is 50-50. CareShield Life’s incremental premium structure with incremental payouts made over a longer premium term allows for lifetime monthly payouts.

Making it compulsory for young Singaporeans ensures payout coverage for all future generations.

ElderShield CareShield Life
Monthly Cash Payouts $300 or $400 $600 (starting from 2020)
Payout Duration 5 or 6 Years Lifetime, increases with time
Annual Premiums Fixed Varied, increases with time until age 67
Premium Duration From age 40 to 65 From age 30 to 67
MediSave Payable Yes Yes
Administration Private Insurers Government
Compulsory? Automatically enrolled (but you can opt out) Optional for those born in 1979 or earlier. Compulsory for those born in 1980 or later.
Cover Pre-existing Conditions? Depends Can cover except those who are already severely disabled (for those born in 1979 or earlier)
Subsidies and Incentives No Yes

 Questions about CareShield Life? Contact us here at hello@treeofwealth.sg, or simply fill below:

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