Review: Best Careshield Life Supplement Option [In-Depth Analysis]

Review: Best Careshield Life Supplement Option [In-Depth Analysis]
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Last Updated on by Tree of Wealth

According to Ministry of Health, there is a high chance that Singaporeans could be severely disabled after retirement (65 years old). Long-term care is not cheap and there are many costs involved.

CareShield Life is an improvement over the previous ElderShield, administered by the Government and is a:
long-term care insurance scheme that provides basic financial support should Singaporeans become severely disabled, especially during old age, and need personal and medical care for a prolonged duration (i.e. long-term care).”

Source: https://www.careshieldlife.gov.sg/careshield-life/about-careshield-life.html

Why do we need CareShield Life?

1 in 2 healthy Singaporeans aged 65 could become severely disabled in their lifetime, and may need long-term care. Severe disability may arise due to a sudden disabling event (e.g. stroke and spinal cord injuries), the worsening of chronic conditions and diseases (e.g. diabetes), or the progression of illnesses as we age (e.g. dementia).

Since 1st Oct 2020, here are the 3 main groups of people that will be affected:

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 in 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 1 October d-2021 if you’re not currently severely disabled.

CareShield Life vs ElderShield Life

ElderShield CareShield Life
Monthly Cash Payouts $300 or $400 $600 (starting from 2020)
Payout Duration 5 or 6 Years Lifetime, increases with time (2%)
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

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While CareShield Life is good, it is ultimately still a basic plan that supports Singaporeans in the event of being disabled totally and severely, especially in old age. That is when long-term care in the form of personal and medical care is required, not for a temporary term but a prolonged duration.

When that occurs, naturally the question will be, how much do we need and what are the alternative solutions?

Lets break that cost down:

1. Cost Of Living Care

According to the study conducted recently, in Singapore the amount that an elderly above 65 years old needs $1,379 every month to meet the basic needs. This is based on single elderly households.

For elderly couples, the amount is $2,351 monthly.

For someone aged between 55 to 64 years old, the amount is $1721.

Source: CNA – https://www.channelnewsasia.com/news/singapore/elderly-need-1379-a-month-for-basic-needs-lkypp-study-11554680

Take in mind that this is taking into consideration a healthy elderly that is not severely disabled and long-term care costs are not factored in.

In the event of severe disability in old age, nursing home care would be factored in and the cost would be anywhere from $1,200 to around $4,500

Source: https://www.income.com.sg/blog/nursing-homes-in-singapore

If a healthy elderly aged 65 needs $1,379 every month to meet their basic needs, what more a severely disabled one that requires long-term care like nursing home that ranges from $1,200 to $4,500?

To put things into perspective, it is safe to estimate an amount of $3,000 to $4,500 or even $5,000 is needed monthly in the event of severe disability and requires full time care.

This is why CareShield Life is an insurance scheme that provides for basic long-term financial support. Yes it does pay out $600 monthly for life (and escalating at 2% for both payouts and premiums for the scheme’s first 5 years of implementation, an independent council will be set up and advice the government accordingly), but the question is… Is it enough?

2. Number of ADLs Impact Severely Disabled Definition

The assessment and the definition of ADLs are as follow:

  1. Washing – The ability to wash in the bath or shower (including getting into and out of the bath or shower) or wash by other means.
  2. Dressing – The ability to put on, take off, secure and unfasten all garments and, as appropriate, any braces, artificial limbs or other surgical or medical appliances.
  3. Feeding – The ability to feed oneself food after it has been prepared and made available.
  4. Toileting – The ability to use the lavatory or manage bowel and bladder function through the use of protective undergarments or surgical appliances if appropriate.
  5. Walking or Moving Around – The ability to move indoors from room to room on level surfaces.
  6. Transferring – The ability to move from a bed to an upright chair or wheelchair, and vice versa.

Source: Ntuc Income

The definition for CareShield Life’s payout is Severely Disabled, and by that it means 3 out of these 6 Activities of Daily Living (ADLs). However if a major disability were to occur and cannot perform 1 or 2 out of the 6 ADLs, there will be no payouts from CareShield Life at all.

Below we look at the top factors that contribute to severe disability:

1. Source: Aviva’s Long-term Care Study 2018.
2. Source: Ministry of Health, Long Term Care Financing, retrieved on 6 April 2020 from https://www.careshieldlife.gov.sg/long-term-care/planning-ahead.html.

Enter Careshield Life Supplement

CareShield Life CareShield Life Supplement Upgrade
$600 Monthly Payout Up to $5,000 Monthly Payout
Lifetime Payout Lifetime Payout
3 out of 6 ADL’s 2 out of 6 ADL’s
MediSave Payable MediSave Payable (Up to $600) and Cash

As Long-term care is getting income and cost of care replacement in the event of severe disability (emphasized more as the person ages), CareShield Life is ultimately a basic coverage and may not be enough to pay for any of those and survive with a $600 monthly payout. With or without using cash, supplement plans give you the choice to go for a higher monthly income at up to $5,000 at a less severe claim criterion, which leads us to the second point:

CareShield Life’s payout criterion is set at the inability to perform 3 out of 6 ADL’s. CareShield Supplement plans have lower criteria at 2 out of 6 ADL’s. Additionally, you can utilize your MediSave account with an Additional Withdrawal Limit (AWL) of $600 to get this supplement plan. If the premium exceeds $600, the remaining amount can be paid by cash (read more for premium table).

Below we look at the comparison of insurer’s features as well as pros and cons of their supplementary CareShield Life plan.

Features Comparison: Aviva VS NTUC Income

Aviva MyLongTermCare Plus NTUC Income Care Secure
Monthly Income Paid Out Upon 2 out of 6 ADL 2 out of 6 ADL
Premium Term Options Until ANB (Age Next Birthday) 68 and 98 Until 67 and 84 Age Last Birthday
Waiver of Premium Inability to do 1 out of 6 ADLs Inability to do 2 out of 6 ADLs
Escalating payout benefit Option to Choose Level, 2% or 3% No Option
Dependent Care Benefit If you have a dependant (below ANB 22), additional 20% of payout for up to 36 months upon disabled

 

If you have a dependant (below age 21), additional 25% of payout for up to 36 months upon disabled
Caregiver Relief Benefit In the event if you are unable to perform of 2 out of 6 ADLs, there is a Monthly Caregiver Relief benefit of 60% of Sum Assured to be paid out, for up to 12 months. No Option
Guaranteed Issuance Option (GIO) Choose to increase monthly payouts with no medical underwriting for 7 life stages event by 50%

7 Life Stage Events:

·          Change in Marital Status: Getting married, divorce or widowed

·          Purchases a property

·          Becoming a parent: Newborn child or legal adoption below 18 years old (19 ANB)

·          Increase in salary of more than 50% since application

·          Spouse suffers TPD (3 out of 6 ADLs) or dies

·          Getting a new Life Insurance OR Rider (Supplementary Benefit) from Aviva Ltd with full underwriting at standard terms

No Option
Death Benefit 300% of Monthly Payout 300% of Monthly Payout
Lump Sum Support Benefit (One Time) 3 times the Monthly benefits ·          300% of Monthly benefits if due to 2 out of 6 ADL’s

·          600% of Monthly benefits if due to 3 out of 6 ADL’s

Monthly Benefit Range $200 – $5, 000 $1, 200 – $5, 000
Disadvantages ·          For lower monthly payouts, premiums are more expensive

·          Best valued premium term is until age 99

·          Escalating (at 2% and 3%) also escalates premiums

·          Only Level payout option, no escalating (2% or 3%) option for 2 out of 6 ADL’s

·          For inability to perform 3 out of 6 ADL’s, monthly payout will INCLUDE CareShield Life payout, reducing overall payout amount (refer to diagram below)

·           Premiums get very expensive for higher monthly payouts

Assuming the Life Insured is already receiving a supplementary monthly payout of $4,500 due to inability to perform 2 out of 6 ADL’s. On the 10th year the Life Insured’s condition worsen and is now unable to perform 3 out of 6 ADL’s, below figures will show the payout given.

Difference in 3 out of 6 ADL’s Payout

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Premium Table Comparison: Aviva MyLongTerm Care Level Premiums

For comparison, the premium term chosen is ongoing mode and until age 99.

Aviva has an ongoing promotion of 20% perpetual discount and the premium below is NOT reflected and is before the discount.

The MediSave Additional Withdrawal Limit of $600 applies. For example, if the premium for Male Age Last Birthday 30 with a monthly payout of $1,200 is $459.16 ($573.95 – 20% discount), there will be no cash payment needed. If the premium for monthly payout of $4,000 has an annual premium of $1462.05 ($1827.56 – 20% discount), the cash portion needed is $862.05 after reducing $600 from MediSave.

Premiums are all in annual basis.

Monthly Payout Age Last Birthday 30 Age Last Birthday 35 Age Last Birthday 40
  M F M F M F
$1,200 $573.95 $702.35 $683.09 $839.74 $829.46 $1,024.63
$1,500 $717.44 $877.94 $853.86 $1,049.67 $1,036.83 $1,280.79
$2,000 $935.18 $1,149.18 $1,117.08 $1,378.16 $1,361.04 $1,686.32
$2,500 $1,168.98 $1,436.48 $1,396.35 $1,722.70 $1,701.30 $2,107.90
$3,000 $1,370.67 $1,691.67 $1,643.52 $2,035.14 $2,009.46 $2,497.38
$3,500 $1,599.12 $1,973.62 $1,917.44 $2,374.33 $2,344.37 $2,913.61
$4,000 $1,827.56 $2,255.56 $2,191.36 $2,713.52 $2,679.28 $3,329.84
$4,500 $2,056.01 $2,537.51 $2,465.28 $3,052.71 $3,014.19 $3,746.07
$5,000 $2,284.45 $2,819.45 $2,739.20 $3,391.90 $3,349.10 $4,162.30

Premium Table Comparison: NTUC Income Care Secure Level Premiums

For comparison, the premium term chosen is ongoing mode and until age 84 (longest for NTUC Income).

The MediSave Additional Withdrawal Limit of $600 applies. For example, if the premium for Male Age Last Birthday 30 with a monthly payout of $1,200 is $175.30, there will be no cash payment needed. If the premium for monthly payout of $4,000 has an annual premium of $1,757.20, the cash portion needed is $1,157.2 after reducing $600 from MediSave.

Premiums are all in annual basis.

Monthly Payout Age Last Birthday 30 Age Last Birthday 35 Age Last Birthday 40
  M F M F M F
$1,200 $175.30 $245.40 $241.30 $336.50 $349.50 $489.30
$1,500 $328.40 $447.60 $442.80 $600.00 $589.90 $812.60
$2,000 $614.10 $859.90 $778.70 $1,086.00 $990.40 $1,386.50
$2,500 $899.90 $1,259.80 $1,114.70 $1,554.40 $1,390.90 $1,947.20
$3,000 $1,185.60 $1,659.90 $1,450.60 $2,022.90 $1,791.40 $2,508.00
$3,500 $1,471.40 $2,059.90 $1,652.10 $2304.00 $2,031.70 $2,844.40
$4,000 $1,757.20 $2,460.00 $2,122.40 $2,959.80 $2,592.50 $3,629.40
$4,500 $2,042.90 $2,860.10 $2,458.30 $3,428.20 $2,993.00 $4,190.10
$5,000 $2,328.70 $3,260.10 $2,794.30 $3,896.70 $3,393.50 $4,750.90

Conclusion

Both Aviva and NTUC Income have competitive features for their CareShield Life Supplementary plans. Below we see the key differences of each Insurer’s strong pros and cons at a glance to help you make your decision:

Aviva MyLongTermCare Plus NTUC Income Care Secure
Waiver of Premium Inability to do 1 out of 6 ADLs Inability to do 2 out of 6 ADLs
Escalating payout benefit Option to Choose Level, 2% or 3% No Option
Dependent Care Benefit Additional 20% of payout for up to 36 months Additional 25% of payout for up to 36 months
Caregiver Relief Benefit 2 out of 6 ADLs: Monthly Caregiver Relief benefit of 60% of Sum Assured to be paid out, for up to 12 months. No Option
Guaranteed Issuance Option (GIO) Choose to increase monthly payouts with no medical underwriting for 7 life stages event by 50% No Option
Lump Sum Support Benefit (One Time) 3 times the Monthly benefits ·          300% of Monthly benefits if due to 2 out of 6 ADL’s

·          600% of Monthly benefits if due to 3 out of 6 ADL’s

Monthly Benefit Range $200 – $5, 000 (Wider Range of Choices) $1, 200 – $5, 000
Disadvantages ·          For lower monthly payouts, premiums are more expensive

·          Best valued premium term is until age 99

·          Escalating (at 2% and 3%) also escalates premiums

·          Only Level payout option, no escalating (2% or 3%) option for 2 out of 6 ADL’s

·          For inability to perform 3 out of 6 ADL’s, monthly payout will INCLUDE CareShield Life payout, reducing overall payout amount (refer to diagram below)

·           Premiums get very expensive for higher monthly payouts

Queries and want to find out more? Simply fill in the form below and our licensed professional financial advisor will get in touch with you. We work with professional financial advisors comparing and analyzing to provide non-biased solutions for you, based on your concerns and individual needs. Also adhering to your privacy, your given information will only be used to communicate with you.

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