What is Eldershield?
Singaporeans and PRs aged 40 and above, who are not already severely disabled, are eligible for enrolment into ElderShield. If you are eligible, you can purchase an ElderShield policy from one of the selected private insurance providers using cash or Medisave funds.
Under the existing ElderShield 400, policyholders will receive a payout of $400 per month for a maximum of 72 months (6 years) if they are assessed to have “severe disability”. The criteria for severe disability are when a person cannot perform at least 3 out of 6 Activities of Daily Living (ADLs). CareShield Life will share the same payout criteria.
What is CareShield Life?
ElderShield will be replaced by CareShield Life in 2020. While ElderShield will no longer apply to new cohorts turning 40 from 2020 onwards (those born in 1980 or later), it will continue to be operational for existing cohorts who are already enrolled.
This means that ElderShield policyholders will continue to enjoy the benefits of ElderShield unless they choose to join CareShield Life, which then replaces their ElderShield policy.
How does it affect you?
Those aged 30 to 40 in 2020 (born between 1980 to 1990) will be enrolled into CareShield Life in 2020, while newer cohorts will be covered when they turn 30.
Come 2021, existing cohorts under the old ElderShield (born 1979 or earlier) will have a few decisions to make.
Option A: Remain on ElderShield
Option B: Switch to CareShield Life
Option C: Opt out of ElderShield, without switching to CareShield Life
Before deciding if it makes more sense to switch to CareShield Life, we need to understand the key differences between the two
Things to consider:
Here are a few considerations you need to be aware of, starting with some of the trade-offs between the policies.
1. Lifelong payouts is probably the most important component to consider. While the existing ElderShield plan has a maximum payment duration of six years, it raises an obvious question – what happens if a policyholder outlives those six years? It’s unlikely that after six years of being severely disabled, an individual can recover to the point of not requiring additional medical and financial support.
The simple solution is to have lifelong payouts. This way, the policyholder and their family have the assurance that CareShield Life payouts will continue for as long as the policyholder lives. In addition, the Government has promised that CareShield Life policyholders will never lose coverage due to their inability to pay premiums – giving us greater peace of mind.
2. Higher payouts that increase over time will help ensure that the amount received remains relevant for policyholders even as they age. For example, while $600 today provides basic long-term care support, including medical supplies, home nursing services or hiring a domestic helper, there is no guarantee that this same amount will be sufficient in the future. Hence, CareShield Life payouts will go up by an estimated 2% per annum in order to keep pace with inflation.
However, with the enhanced benefits, higher premiums are to be expected for CareShield Life policyholders, which will increase in tandem to support increasing payouts.
As a simple yardstick for comparison, CareShield Life premiums payable for 40-year-olds joining in 2020 starts from $300 (male) and $360 (female). In contrast, ElderShield premiums for those starting coverage from age 40 is $175 (male) and $218 (female).
In order to offset the higher premiums, means-tested premium support and other forms of financial schemes, including a 10-year participation incentive, for those born in 1979 or earlier has been introduced as an integral part of CareShield Life.
3. Administered by the government, underwriting will be more inclusive for those who might have opted out from ElderShield previously, but would now like to be enrolled under CareShield Life.
For example, if you had initially opted-out and now wish to enrol into ElderShield, you will be subjected to a medical assessment by the private insurer, and may be rejected if you have certain pre-existing illnesses. Under CareShield Life, you are able to join from 2021 onwards, as long as you are not severely disabled. This lenient underwriting criterion compared to private insurers is a deliberate decision by the government.
4. Lastly, participation incentives will be available for all Singapore citizens born in 1979 or earlier who choose to join CareShield Life in the first two years, starting from 2021. The incentive amount will differ, depending on the age of the individual. The participation incentives offset annual premiums over 10 years.