There’s a new disability insurance scheme that is about to be launched in Singapore called CareShield Life (终身护保).
This type of disability insurance is not entirely new. Before CareShield Life, there was ElderShield (乐龄健保). Both provide payouts in the event of severe disability. But there are major differences in terms of premiums, premium terms and eligibility.
For Singaporeans aged 40 and below, you will be automatically enrolled into CareShield Life in mid-2020. There’s no option to opt out, so this comparison isn’t really relevant for you.
This article is rather intended for Singaporeans who are above 40 years old. They have a choice if they want to stay enrolled, manually opt in, or opt out totally. So let’s compare and understand what the significant differences between the two schemes are.
Both CareShield Life & ElderShield are disability insurance schemes
Both CareShield Life and ElderShield Life are disability insurance schemes aimed to provide payouts if or when you become severely disabled. Both plans are fully payable by MediSave.
They both use the government’s definition of severe disability. Essentially, it’s the inability to do at least 3 out of 6 Activities of Daily Living (ADLs). These ADLs are: washing, dressing, feeding, toileting, walking or moving around and transferring.
FYI: Just knowing that you qualify isn’t enough. You need to be certified by a MOH-accredited severe disability assessor to be able to claim for payouts.
So, now we know how they are similar. What about the differences?
Differences between CareShield Life & ElderShield (2020)
|Monthly Cash Payouts||$300 or $400||From $600|
|Payout Duration||5 or 6 years||For life|
|Premiums||Fixed||Increases with time until age 67 or when a claim is made.|
|Annual premiums||Under ElderShield 400
$174.96 per year (Male)
|Depends on entry age (see MOH premium calculator)|
|Premium term||Age 40 to 65||Age 30 to 67|
|Enrollment||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||Maybe||Yes, for those born in 1980 or later|
|Subsidies and Incentives||No||Yes|
Basically, under the CareShield Life scheme, younger Singaporeans (age 40 and under in 2020) have to contribute incremental premiums over a longer premium term. This is compulsory.
This is so that Singaporeans who become severely disabled get lifetime monthly payouts that increase over time.
The previous ElderShield scheme only pays out for 5 to 6 years, which may not be enough in view of the fact that Singaporean’s average lifespan has increased to 84.8 years.
Under CareShield, the monthly cash benefit is also higher, starting at $600 per month in 2020. Plus, it covers pre-existing conditions for those both in 1980 or earlier.
If you are older than 40 in 2020, you have the option of staying enrolled in CareShield Life, opt out of it, or opt in by choice. Why so many options? Read on.
What do you need to do following the introduction of CareShield Life?
If you’re born in 1979 or earlier, after reading this article, you need to make a decision as to whether or not you want to enroll into CareShield Life.
Born earlier than 1970: You can opt to join CareShield Life from mid-2021 if you’re not currently severely disabled.
Born between 1970 and 1979: If you are currently covered under the ElderShield 400 and are currently not severely disabled, you will be enrolled automatically. You have a choice to opt out anytime from the launch of CareShield to 31 Dec 2023. Your premiums will be refunded.
Born between 1980 and 1990 (30 to 40 years old in 2020): You’re automatically covered under CareShield Life. Younger than that? You are enrolled when you turn 30. This is compulsory.
Other Things You Need to Know About Careshield & Eldershield
First, the transition from ElderShield to CareShield for Singaporean residents will take time. Younger Singaporeans born 1980 and later will be automatically enrolled with no exceptions starting mid-2020, or when they turn 30. If you were born in 1979 or earlier, you have the option to enroll in mid-2021.
If you’re already covered under the existing ElderShield and ElderShield supplements, they continue to stay in force, with the same premiums and benefits. The administration of the schemes will be taken over by the government from insurers in mid-2021. Only the supplements will stay with private insurers.
Side note: There is no information on CareShield Life supplements at the moment.
By mid-2021, ElderShield will likely not accept new applications.
Above 40 in 2020? Here are 3 possible scenarios to consider.
1. You were automatically enrolled and are still covered by the basic ElderShield. Should you opt in to CareShield Life?
If you become severely disabled, under ElderShield you get $300 to $400 per month for 5 to 6 years. For this coverage, you pay $174.96 (men) or $217.76 (women) in yearly premiums.
You have 3 options in mid-2021. Switch to CareShield Life, remain on ElderShield 400 or upgrade your ElderShield plan to get higher payouts.
Under CareShield Life, premiums based on a man aged 41, earning $2,801 amount to $268 after subsidies and participation incentives. This amount increases over time, and the premium term is until you turn 67 years old. That’s potentially 26 years if you’re 41.
In return for higher premiums, you get higher monthly payouts ($600 starting from 2020) that increases over time, and for life.
Research shows that 3 in 10 remain in severe disability for 10 years or more, so CareShield Life provides better peace of mind, but it comes with higher premiums. So it’s all about how much risk you are comfortable with, and your budget.
2. You are covered by ElderShield and an ElderShield supplement. Is it still worth it to opt in to CareShield Life?
An ElderShield supplement ensures that you receive a higher monthly payout over a longer period than the basic ElderShield. You could use up to $600 a year from MediSave to pay for the premiums for the supplement. If you want higher monthly benefits, you could top up cash as well.
Depending on your plan, you may find that switching to CareShield Life may not be a more superior choice, since you could potentially receive similar monthly benefits (starts at $600 in 2020) at levelled and fixed premiums.
CareShield Life’s premiums increase over time and the premium term might be longer, until age 67.
Ultimately, you have to do your own comparison based on your existing supplement to see if you should remain on ElderShield and ElderShield supplement or switch to CareShield Life in mid-2021.
3. You don’t have ElderShield.
You may have opted out, got rejected, or were older than 40 in 2002. Whatever it was, you currently don’t have ElderShield. You can consider CareShield Life premiums and premium terms to decide if you should join it or not.
CareShield Life Supplement
Of course, comparing ElderShield supplement with CareShield Life basic scheme isn’t really fair. We need to see what CareShield Life Supplements can provide. Currently, there isn’t much information available.
Contact us to get updates on the latest CareShield Life Supplements.
Frequently Asked Questions
- How to know if I’m on Eldershield 300 or 400?
If you enrolled before 30 September 2007, you’re on ElderShield $300. You get $300 a month over 5 years if you become severely disabled. If you enrolled on 30 September 2007 or later, you’re on ElderShield 400. This means you get $400 a month over 6 years if you become severely disabled.
- What is Careshield Life in Chinese?
CareShield Life is 终身护保 while ElderShield Life is 乐龄健保. CareShield Life’s Chinese name succinctly tells you that the scheme gives monthly payouts for life.
- Is CareShield Life compulsory?
It is only compulsory if you are born in 1980 or later, meaning you are 40 or younger in 2020.
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