By 2050, nearly half of Singapore’s population will be at least 65 years old. Government spending on healthcare is expected to go up, and as individuals, we’ll have to make preparations to ensure that we can afford it, too.
But what if you become disabled due to age or adverse health conditions? Neither scheme can fully cover your long-term care needs. Enter CareShield Life, a disability insurance scheme that pays out for your personal and medical expenses.
What is CareShield Life?
CareShield Life is a disability insurance scheme launched by the government in October 2020. The scheme will pay out a monthly income if you become severely disabled, no matter where in the world you are living.
What qualifies as “severely disabled”? CareShield Life defines this as being unable to perform at least 3 out of 6 Activities of Daily Living (ADLs). They are:
- Washing – Washing in the bath or shower (including getting in and out) or by other means
- Dressing – Putting on, removing, securing and fastening all clothes, braces, artificial limbs or other surgical or medical appliances
- Feeding – Feeding yourself prepared and available food
- Toileting – Using the toilet and managing bowel and bladder function through the use of protective undergarments or surgical appliances if appropriate
- Walking or moving around – Moving indoors from room to room on level surfaces
- Transferring – Moving from a bed to an upright chair or wheelchair and vice versa
You are entitled to CareShield Life payouts if you are unable to perform at least 3 of the above.
Do we really need CareShield Life?
How real is the need for payouts when you’re disabled?
Well, an estimated 1 in 2 healthy Singaporeans aged 65 could become severely disabled before they die. Being severely disabled typically means we need help with eating, going to the toilet or walking around — activities that require a caregiver of some kind.
While CareShield Life sounds suspiciously like MediShield Life health insurance, there’s no duplication of coverage.
CareShield Life pays out cash to help with your living expenses. MediShield Life and MediSave, on the other hand, only cover medical expenses as and when they’re incurred. You don’t get a payout in cash.
Is CareShield Life compulsory?
The scheme will automatically cover Singapore Citizens and Permanent Residents born in 1980 and later, from the age of 30 onwards. (Not yet 30? You will receive a notification letter 2 months before your 30th birthday.)
Once enrolled, it is mandatory and you cannot opt out.
Those born before 1980 can apply to join from the end of 2021 onwards. There is no age limit, and the government will release information on how to apply later on in the year. However, you cannot join the scheme if you are already severely disabled.
If you were born between 1970 and 1979, you would be currently insured under the ElderShield scheme and will be automatically enrolled into CareShield Life from the end of 2021. You can opt to stay on ElderShield by 31 Dec 2023 if you wish.
CareShield vs ElderShield – which is better?
CareShield Life replaces ElderShield, the government’s previous disability insurance scheme. It is a much better insurance plan, with higher and longer payouts.
|Monthly payouts||$300 to $400||From $600|
|Payout period||5 to 6 years||No limit|
|Entry age||Age 40||Age 30|
|Premium term||Up to age 65||Up to age 67|
For starters, CareShield Life raises ElderShield’s monthly payouts of $300 to $400 to $600, a sum which will will be adjusted upwards over the years in order to accommodate the rising cost of living. And while ElderShield’s benefits were paid out over a period of five to six years, CareShield’s Life’s will be payable for life, or as long as the severe disability persists.
The entry age for CareShield Life is also earlier at 30, as opposed to ElderShield’s previous 40, and premiums for CareShield Life will be paid until 67, as opposed to ElderShield’s 65.
Of course, in exchange for enhanced protection, higher premiums must be paid. CareShield Life premiums are higher than ElderShield’s and, if no claim is made, rise until you reach the age of 67.
How much are CareShield Life premiums?
At the age of 30, premiums start at $206 for men and $253 for women. They rise by 2% every year until the age of 67. You can pay for your premiums fully using MediSave.
Also, once you become disabled enough to make a claim, you no longer need to pay the CareShield Life premiums.
How much does CareShield Life pay out?
After paying the premiums and being enrolled in the CareShield Life scheme, you can claim monthly payouts for as long as you are severely disabled (i.e. unable to perform at least 3 out of the 6 ADLs above).
When the scheme was launched in 2020, the monthly payout was set at $600. The payout rises 2% per year from 2020 to 2025, so in 2021 the payouts should be about $612 a month.
|CareShield Life monthly payout|
From 2026 onwards, CareShield Life payouts will be adjusted depending on recommendations following a review.
However, once you make a successful claim or hit the age of 67, whichever is earlier, your CareShield Life payout amounts will be fixed and therefore no longer rise.
Should you upgrade your CareShield Life?
Under the default CareShield Life scheme, monthly payouts are rather low. $612/month only sounds decent if you’re young and merely temporarily disabled, and can go back to work once you recover.
However, if you’re in old age and going to be disabled for the foreseeable future, it’s pretty dismal. Especially since the amount remains fixed once you start receiving payouts.
You can enhance your CareShield Life protection by purchasing a CareShield Life supplement from one of 3 private insurers: Great Eastern, Singlife with Aviva or NTUC Income. They have the following benefits:
- They make it easier to qualify for disability income by lowering the number of ADLs from 3 to 2 (or even 1)
- They increase your monthly payouts to a more comfortable amount of your choice
- Some plans allow you to choose increasing payouts to match inflation
- You can use up to $600 a year from MediSave to pay the additional premiums
How to decide on a CareShield Life supplement?
When buying a CareShield Life supplement, you need to decide how much disability income you want. Given the uncertainty of long-term care costs and the duration of severe disability should this happen to us, working out this amount can be difficult.
In the best case scenario, you have a family member willing to care for you for free. But you’d still need enough for your daily living expenses, mobility aids, transport and so on.
On the other hand, your disability could be so severe that you need to be placed in a nursing home. This can cost thousands of dollars a month.
In any case, you should have a number in mind before you start comparing. It’s relatively simple to compare providers since there are only 3 insurers.
How do you make a CareShield Life claim?
You can’t simply claim that you’re unable to perform 3 out of 6 ADLs and expect to receive your first payout. No — to make a claim, you need to be officially assessed by an MOH-accredited severe disability assessor.
The assessment costs $100 at a clinic and $250 if the assessor travels to your home, but this fee is waived if it is your first assessment for the purposes of CareShield Life. If you are found to be severely disabled, the full assessment fee will be reimbursed with your first payout.
Those living in nursing homes can just get the home to submit a Resident’s Assessment Form, which can replace the severe disability assessment.
Once you have been assessed as severely disabled, you can then submit a claim application form to the Agency for Integrated Care (AIC) by logging in here with your SingPass.
If you have a private CareShield Life supplement plan, your agent might be able to help with the claim. However, the procedure will fairly similar.
What are the next steps you should take?
Having disability insurance like CareShield Life is good, but we think it is less important than other areas such as health insurance. If you haven’t done a single thing about your insurance coverage, you should definitely start there first.
As the government’s MediShield Life offers only very basic coverage, we highly recommend opting for an Integrated Shield plan to supplement your health insurance. You can compare providers and get quotes on MoneySmart.
Next, if you have dependents, you may also want to sort out your life insurance. This ensures that your dependents will still have a roof over their heads and some money to live on if you die an untimely death.
Once that’s sorted, you can move on to disability insurance to beef up your protection even further. Consider opting for a CareShield Life Supplement if you can afford it. It covers severe disability at any age (not just when you’re old) so think of it as a hedge against accidents as well.
But if you’ve reached your limit for insurance spending at the moment and are relatively young, you can always postpone the purchase of a CareShield Life supplement to a later age.
Found this article useful? Share it with anyone who’s eligible for CareShield Life.