What are ElderShield & CareShield Life?
A Thorough Comparison & Analysis
ElderShield is a national disability insurance scheme that automatically enrolled for this plan when they turn 40 years old.
ElderShield aims to provide basic insurance coverage to Singaporeans who are in need of long-term care support during their old age.
Unlike Medishield Life, which is compulsory for all, ElderShield is an opt-out scheme. That means all Singaporeans and Permanent Residents (PRs) can choose to opt-out of the insurance scheme if they wish to.
CareShield Life is a national disability insurance scheme that will replace the ElderShield scheme. This replacement will also automatically enrol citizen when they turn 30.
CareShield Life is a compulsory scheme and cannot be opt-out.
Table of Contents
What is ElderShield?
How does ElderShield work?
Why do I need ElderShield if I already have MediShield Life?
MediShield Life and ElderShield are both insurance plans but they have different purposes. They complement one another by offering protection against various types of healthcare expenses.
MediShield Life is a basic healthcare insurance which helps to pay for large hospital bills and expensive outpatient treatments such as dialysis and cancer chemotherapy. It targets B2/C class wards and subsidized public hospital treatment.
ElderShield is a national severe disability insurance scheme that provides basic financial support for disabled people with severe disabilities who need long term care. ElderShield can pay a monthly cash payout of $300 or $400 to the insured if the insured is severely disabled, which can help pay some of the living expenses to care for a severely disabled individual.
MediShield Life is a basic hospitalisation insurance plan which helps to pay for large hospital bills and selected costly outpatient treatments, like chemotherapy and kidney dialysis treatment.
Both ElderShield & CareShield Life provides cash payouts in the
event of severe disability, regardless of care setting
ElderShield is a long-term care insurance scheme targeted at severe disability which provides monthly payouts of $300 or $400 per month.
CareShield Life will provide higher payouts starting from $600/month, which increase over time with no payout cap, to provide better protection against the uncertainty of long-term care costs if you become severely disabled.
What does ElderShield & CareShield Life Cover? And what is Severe Disability?
Both ElderShield and CareShield Life are long-term care insurance scheme targeted at severe disability.
“Severe disability” is the inability of an individual to perform three or more Activities of Daily Living (ADLs) independently, with or without mobility aids (e.g. walking aids, wheelchair). This means that the individual will require the physical assistance of another person for the ADL.
Why is it important to me?
If you think about it, we need to be able to do these important daily things (Activities of Daily Living – ADLs) before we can even get out of the house every morning.
In the event of a severe disability, I can only imagine how mentally, emotionally and financially difficult it will be for oneself and loved ones. In terms of getting a skilled helper nurse or even nursing care services there is undoubtedly a need for long term care.
An additional cost of $2,324 a month can over time become a heavy financial burden on the family and one’s self. That’s why planning for long-term care is a crucial thing to prepare for. ElderShield & CareShield Life is a national severe disability insurance plan that seeks to cover some of the costs.
Moving on, we shall take a look at ElderShield first...
What does ElderShield cover?
Under ElderShield 300, policyholders will receive a $300 monthly payout for up to 60 months (5 years)
Under ElderShield 400, policyholders will receive a $400 monthly payout for up to 72 months (6 years)
Payout will occur if they are evaluated as having “severe disability.” The severe disability criteria are when an individual is unable to conduct 3 out of 6 Daily Living (ADLs) activities.
Key benefits about ElderShield
- Monthly cash payouts
– As long as you are severely disabled up to 6 years
- Covered for life
- Premium period till age 65
- Premiums fully payable by Medisave
Am I under ElderShield 300 or 400?
What are ElderShield supplements?
- Payout of $400 per month is insufficient from basic ElderShield on its own to meet the additional cost that comes with long-term assisted living.
- As such, all three insurers for ElderShield, Aviva, Great Eastern & NTUC Income, have ElderShield supplement plans that allow policyholders to enjoy higher payout, and for payout to be extended beyond 72 months.
- ElderShield Supplements are plans which complement your basic ElderShield plan by offering additional benefits which increase your coverage. You will need to be an existing ElderShield policyholder to purchase Supplement plans.
Key feature of ElderShield supplements
- Enhance the coverage on top of the basic ElderShield
- Offers higher monthly payouts or payouts for a longer period or a combination of both
- Managed by a private insurer – Aviva, Great Eastern & NTUC Income
- Premiums can be paid using MediSave (up to a limit of $600 per year per person insured).
Additional Withdrawal Limits (AWLs) for ElderShield supplements
You will always be able to pay for your annual ElderShield premiums fully using your Medisave
If you decide to upgrade to enhance with supplements, the annual premium for the additional private insurance component is payable by Medisave, but only up to the prevailing Additional Withdrawal Limits (AWLs) of a limit of $600 per year per person insured.
Should I opt-out ElderShield?
Coverage is relatively inexpensive. Premiums are charged via MediSave on an annual basis from age 40 till 65. Premiums will cease after the age of 65 while coverage would continue for life.
Old age can bring with it health-related issues. According to the Ministry of Health, 1 in 2 Singaporeans who are healthy at the age of 65 is at risk of having a long-term disability over their lifetime. It’s wiser to continue with ElderShield.
Unless you have specific reasons, we would advise for Singaporeans to not opt-out of ElderShield and to simply continue being enrolled for it.
Next, let's take a look at CareShield Life...
What is CareShield Life?
CareShield Life is essentially ElderShield 2.0 with a funky new tag, newer but better. As part of the government’s effort to better address our ageing population, CareShield Life is almost identical to ElderShield but with better coverage
Payout will occur if they are evaluated as having “severe disability.” The severe disability criteria are when an individual is unable to conduct 3 out of 6 Daily Living (ADLs) activities (as shown below).
Key benefits & how can CareShield Life help you?
CareShield Life will provide a guaranteed cash payout to help cover some of the long-term care expenses in case you are unable to perform 3 out of 6 ADLs. The cash payout starts at $600/mth, and increases over time.
Sure, you may find that the $600/mth is not enough to cover the estimated long-term care costs. But well, it at least offers some basic support to most Singaporeans and PRs. Those who want additional coverage can then receive higher monthly payouts by private insurers obtaining supplements.
Good thing is that since CareShield Life will provide universal coverage for everyone, it will also cover those with pre-existing conditions and disabilities.
How does the payout structure of CareShield Life work?
Difference between ElderShield and CareShield Life
What is the premium for CareShield Life?
You should expect to pay CareShield Life premium from $206 and $366 a year, depending on your age in 2020. Since this is a national scheme all the premiums will be able to pay using Medisave fully and the government will also provide transitional and means-tested subsidies to make the premiums affordable.
To calculate your premium, you can check out the online premium calculator here
Catch-up premium for those who are eligible for ElderShield Scheme
Premiums vs Payout under CareShield Life
What do I need to do to get covered with CareShield Life?
Your CareShield Life policy will start automatically, and the Government will notify you of the exact policy commencement date closer to the expected mid-2020 launch date.
Below is the situation that you may be engaged in.
Subsidies for joining CareShield Life
For those born before 1960, there are incentives to join CareShield Life within 2 years of its launch:
- These subsidies are applicable to Singaporeans who join CareShield Life. For those born in 1979 or earlier, these subsidies are only applicable to the base premium and not applicable to the catch-up component, to ensure parity in premium subsidies across different groups in those cohorts.
- These subsidy rates are applicable to Singapore Citizens who live in residences with an Annual Value of $13,000 or less. Those with an Annual Value between $13,001 and $21,000 will receive 10 percentage points less than these subsidy rates. Those with Annual Value of above $21,000 will not receive these subsidies.
- Individuals with monthly PCHI above $2,800 will not receive these subsidies.
- Permanent Residents receive half of the subsidy rates applicable to Singapore Citizens.
Transitional subsidies to ease their transition into the scheme for the first 5 years from the launch of CareShield Life for Singapore Citizens, born in 1980 and later
Additional incentives for people with monthly per capita household income:
In our opinion, if you have CPF Medisave surplus, why not make an enhancement? Instead of paying cash to enhance your coverage, you can use your Medisave to enjoy better benefits.
Why wait for a health chance to deteriorate and make it more difficult for future applications for better coverage?
Note that all applications will have to go through medical underwriting, so even if you want to upgrade, the application is not guaranteed to go through as your current health condition is assessed.
But first how about taking the first step and compare the ElderShield / CareShield Life upgrades from the participating companies?