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‘SDAs are like our new carpark aunties’
As Singapore marches inexorably towards a silver tsunami, the government has been stepping up plans to ensure the ageing population is cared for. CareShield Life is one of them. This disability insurance scheme aims to offer Singaporeans a monthly payout if they become disabled.
But as with most government insurance schemes, the benefits are quite basic and you’ll have to fork out cash in order to beef it up. Here’s a quick guide to upgrading your basic CareShield Life plan with private insurance.
CareShield Life was introduced in 2020 to replace the previous ElderShield scheme (which was optional). Here are a few quick facts about this national disability income scheme :
Being severely disabled is defined as not being able to perform at least 3 out of the 6 following Activities of Daily Living (ADLs): washing, dressing, feeding, toileting, mobility and transferring. In other words, once you get to the point where you can access payouts, you’re probably going to need help from a caregiver.
Head over here to read more about how CareShield Life affects you.
From 2020 to 2025, CareShield Life payouts are projected to increase by 2% to keep pace with the rising cost of living. After 2025, payout increases will be determined internally.
It sounds great that they’re adjusting CareShield Life payouts upwards over the years, but beware—once you make your first successful CareShield Life claim, your payout amount will be frozen, and you will continue to receive the same amount even if the scheme’s payouts are adjusted upwards later on.
If you haven’t made any claims by the age of 67, any future payouts will be fixed at the level they were the year you hit 67.
In line with the government’s stance that there should be no free lunch, CareShield Life’s benefits are extremely basic. $600 a month doesn’t go very far for someone who is severely disabled, needs a caregiver and in all likelihood cannot work.
You can use up to $200 of your MediSave funds under the MediSave Care umbrella for long-term care needs, but that too is just a drop in the ocean.
As a severely disabled person, you’re going to need a lot more than that to survive.
Unless your family members are willing to care for you full-time, you’ll need to hire a live-in caregiver or at least a domestic helper, which will set you back anywhere from about $500 for a domestic helper to up to $2,500 for a live-in caregiver.
And unless your family pays for your living expenses, you’ll also need to be able to afford food, transport and so on.
The solution is to upgrade your disability protection so you can live on your payouts. But in order to get better disability protection you’ll need a dose of good old self-reliance. In other words, you’ll need to fork out the cash for a CareShield Life supplement from a private insurer.
CareShield Life supplements from private insurers can increase your monthly payouts, and there are currently 3 providers: NTUC Income, Aviva and Great Eastern. Here’s what’s available at the moment.
$1,200 a month, including CareShield Life payouts
$1,000 a month, excluding CareShield Life payouts
$1,000 a month, excluding CareShield Life payouts
*Annual premium for 35-year-old female
Note that you can adjust your private CareShield supplement payouts to up to $5,000 a month. But we chose the most basic payouts to keep the premiums affordable.
You can use up to $600 from your Medisave account per year to pay premiums for all of the above plans.
NTUC Income’s Care Secure offers lifetime coverage with a guaranteed payout of $1,200 to $5,000 if you become disabled and are unable to perform at least 2 ADLs. This requirement is easier to fulfil than CareShield Life’s requirement of not being able to perform 3 ADLs before qualifying for payouts.
Note that NTUC Income Care Secure’s payouts INCLUDE any CareShield benefits you might receive.
So, let’s say you opt for the minimum benefit of $1,200. If you cannot perform 2 ADLs, NTUC Income will pay the full sum of $1,200, since you are not eligible for CareShield Life benefits anyway. But if you cannot perform 3 ADLs, you get $600 from CareShield Life and $600 from NTUC Income.
Once you become disabled enough to receive benefits from the plan, your future premiums are waived until you are no longer disabled and your payments have stopped.
The plan also offers other benefits, including:
For a 35-year-old female getting coverage until age 67, you’ll pay an annual premium of $988.20 for the minimum payout of $1,200.
Aviva’s LongTerm Care Plus offers lifetime protection and bumps up your payouts by $200 to $5,000 a month when you are unable to perform at least 2 out of the 6 ADLs (lower than CareShield Life’s requirement of 3).
These payouts are IN ADDITION TO your CareShield Life payouts.
So, if you buy a LongTerm Care Plus plan with a $1,000 benefit, you will receive $1,000 a month if you cannot perform 2 ADLs, which would not qualify you for CareShield Life. But if you cannot perform three ADLs, you get $1,000 from Aviva and $600 from CareShield Life.
If you wish, you also have the option of choosing increasing payouts which rise at a fixed rate of 2% of 3%. Your future premiums will be waived for as long as you are unable to perform 1 ADL.
Other than your monthly payouts, you’ll also receive the following benefits:
A 35-year-old who opts for $1,000 monthly benefits will pay $548.91 a year in premiums.
Great Eastern’s GREAT CareShield plan provides monthly payouts of $300 to $5,000 on top of your CareShield Life payouts when you are unable to perform at least 2 ADLs (as opposed to the 3 required by CareShield Life).
The plan has two tiers, Enhanced and Advantage. Not exactly obvious given the “every school is a good school” approach to naming the plans, but the higher tier plan is Advanced.
Great Eastern CareShield Advantage:
For the Advantage plan, a 35-year-old female getting coverage until age 65 would pay an annual premium of $685.66 for a monthly benefit of $1,000.
All 3 CareShield Life supplement plans are most beneficial in slightly different areas.
NTUC Income Care Secure is the most cost-effective plan if you cannot perform two ADLs, but not if you become severely disabled and cannot perform three ADLs, as the plan actually pays out less in that case since it is offset by CareShield Life payouts.
Meanwhile, Great Eastern Care Shield Advantage is the best plan if you have a mild disability, as it offers a lump sum mild disability payout if you cannot perform one ADL.
But in my opinion, the most well-rounded plan is Aviva LongTerm Care Plus, which offers the best additional benefits at a decent price point, and also suspends your premium payments if you cannot perform one ADL.
Bear in mind that you can use only $600 a year from your Medisave to pay for your private CareShield coverage. You’ll need to top up the rest in cash.
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