Everything About CareShield Life, How Different From ElderShield?
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CareShield Life is basically ElderShield 2.0, newer but better, with a funky new name.
CareShield Life is almost similar to ElderShield but with better coverage, as part of the Government’s initiative to better address our ageing population.
What is CareShield Life?
Similar to ElderShield, CareShield Life offers a payout upon severe disability to help finance the long-term care cost.
- Lifetime cash payouts
– As long as you are severely disabled
- Payouts increase over time
– Starting from S$600/month in 2020
- Government subsidies available
- Premiums fully payable by Medisave
An improvement from ElderShield
- The original ElderShield 300 provided S$300/month for 5 years – wasn’t enough.
- Upgraded it to ElderShield 400, which provided S$400/month for 6 years – still wasn’t enough.
- Then birth the new CareShield Life.
Are You Automatically Under CareShield Life?
- First Batch for CareShield Life: Those aged 30 to 40 in 2020
|Year of Birth||CareShield Life Details|
|In 1980 or later||Automatically opt in if you are aged 30 to 40|
|Later than 1980||Automatically opt in when you turn 30|
|In 1979 or earlier||- Your current ElderShield will continue to cover you (if you have one);
- You can choose to join from 2021 with incentives
Premiums for CareShield Life
- Premiums begin from age 30 to 67 (or current re-employment age whichever is higher)
- Premiums will increase at a rate of 2% a year for the first five years.
– The rate at which it will increase for subsequent years will be decided by an appointed council.
Estimated Monthly Payout
Source: Ministry Of Health
*Premiums are based on 2% increment rate for the first 5 years
CareShield VS ElderShield?
- Payout upon disability is at least 50% higher
- Payout lasts a lifetime
|Able to opt out?||Yes||No|
|Payable by Medisave||Yes||Yes|
|Premiums start at||40 years old||30 years old|
|Premiums stop at||65 years old||67 years old
(or later according to retirement age)
|Annual premiums*||$175 (Men);|
- Increase 2% every year
|Premiums are paid for (years)||26||38|
|Payout starts when||Unable to do at least 3 Activities of Daily Living (ADLs)|
|Duration of payout||Six years||Lifetime|
Source: The Straits Times
*Using premiums for ElderShield from age 40 and CareShield from age 30
|Total Premiums Paid||S$4,600||S$7,800*|
|Total Estimated Payouts||S$28,000^||S$144,000*|
Note: Figures are rounded to the nearest hundred.
^ ElderShield has a payout of 6 years.
*Premiums are before subsidies. Figures assume a 2% increase in premium per year.
How To Join CareShield Life?
- Singaporeans and Singapore PR born before 1980 can choose to join CareShield Life from 2021.
- Not compulsory for those already under ElderShield.
- Will be required to pay more premiums if they choose to opt for CareShield Life.
Incentives to join CareShield Life
There are incentives for those born before 1960 to join CareShield Life within 2 years of launch:
|Year of Birth||Incentive||Incentive Per Year|
Premium Subsidies Available for CareShield Life
Premium subsidies available for people with monthly per capita household income of:
|Monthly Per Capita Household Income||Subsidy Rate|
|S$1,100 or less||30%|
|S$1,101 – S$1,800||25%|
|S$1,801 – S$2,600||20%|
- Premium subsidies benefits are the same as MediShield Life.
- Singapore Citizens will receive up to S$250 over the first 5 years to help pay for the premiums of CareShield.
I am on ElderShield, can I opt for CareShield Life?
- Those under ElderShield will be able to upgrade to CareShield Life from 2021.
- Not compulsory for those already on ElderShield
- Those who have opted out from ElderShield can opt-in for CareShield Life if they are not currently disabled.
|For people on ElderShield400||For people on ElderShield300|
|Pay a base premium for 10 years or until age 67,
whichever is longer*
|Pay a catch-up premium for 10 years**|
|*Base premium increases regularly to support payout increases, while catch-up component is flat.
**The catch-up premium also applies to those who opted out of ElderShield400 and later opted in, who join CareShield Life from 2022 onwards, and who stopped paying premiums after a minimum of 9 years (ElderShield400) or 11 years (ElderShield300).
Examples for opting for CareShield Life while on ElderShield:
Is the Government trying to profit from their citizens?
- 1.3 million ElderShield policyholders in 2017.
- S$3.3 billion in premiums collected.
- Only about $133 million was paid out in claims.
Previously when ElderShield was covered by only 3 insurers in Singapore resulted in profits which had caused uncertainty for the reason behind the government implementing CareShield Life.
As extracted from their statement, the government assured us that:
- The premiums collected and returns from investments will stay within the fund so that policyholders can benefit through higher payouts or premium rebates.
- Today, premiums collected under ElderShield are more than the claims paid out, as most policyholders are relatively young. However, these premiums collected do not become Government surpluses. Rather, they are meant for future claims – when policyholders become older and more of them make claims for severe disabilities (see Figure 1 for a comparison of premiums collected versus claims).
- All CareShield Life premiums collected will remain within the fund meant for policyholders. It will not be transferred to other Government schemes.
What does the Community think?
Gabriel Tham – “One big problem government will face is increasing healthcare costs. The more healthcare costs increase, the more premium they have to take from Medisave.”
Ashlyn Ho – “Is everyone compulsory to pay this Careshield life? If yes, I’m concerned for those who are unemployed. Is Medisave sufficient to pay for Medishield life and now Careshield? We also need Medisave to be sufficient in case we really hospitalize.”
Kino Ng – “Sounds good, at least it helps those people who touch wood reached a very old age and unable to do the 3 out of 6 things and still managed to get the payout.”
If you have any questions and would like to hear different perspectives from the experienced folks, feel free to ask our Community!
I’ll see you in the next one, and until then, may the Personal Finance force be with you!
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