Enhancements to ElderShield scheme

Long-Term-Care-at-home

Some of you might have heard – our national long term care insurance scheme, ElderShield, will be enhanced and renamed as CareShield Life. This is a good move as Singapore’s population is rapidly aging with shrinking family sizes, hence a declining old-age support ratio.

To be launched in 2020, some of its key points are below:

  • CareShield Life will be universal for all future cohorts of Singapore citizens and Permanent Residents, starting from age 30 and including those with pre-existing disability.

 

  • Higher and lifetime payouts, as long as the insured remains severely disabled (i.e. unable to perform 3 out of 6 Activities of Daily Living, also known as ADLs). Payouts start from $600 per month, and will increase overtime as premiums are paid.

 

  • The government will provide premium subsidies and financial support for CareShield Life.

Since the news was announced, here are some FAQs that I have met with and the respective answers:

 

1. What will happen to existing ElderShield (ESH) policyholders before CareShield Life is launched?

They will continue to be covered and enjoy the benefits under the current ESH policy as long as premiums are paid. No action is required in the meantime. Similarly for policyholders of ESH Supplementary Plans, they will continue to be covered.

 

2. Will universal coverage be extended to existing ESH policyholders?

Existing ESH policyholders will be given the option to join CareShield Life from 2021, pending further details form the Government.

 

3. Should I buy the current ESH Supplementary Plans before CareShield Life is launched?

If you have a need for long term care above the current ESH coverage, you should consider enhancing your coverage with ESH Supplementary plans.

 

Long term care, whether in the form of home care or nursing homes, can incur huge expenses in the long run. Such expenses however, are not covered by the usual hospital & surgical insurance most people have. For more information, I have written a separate article on how to cope with long term care.

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How Can You Cope With Long Term Care?

Screenshot (259)I would like to share with you the story of two friends of mine, who are in distress because their parents require long term care.

George and Joanne are a married couple in their late 40s. George just put his parents in a nursing home, which costs $2,000 per person every month. At the same time, Joanne’s mum is living with them while receiving in-home medical and nursing care. Such home care services costs $1,100 every month.

All 3 parents are either suffering from dementia or stroke, which hampers daily activities like eating and bathing. In particular, George’s mum has lost control of her bladder due to dementia.

They feel stressed and emotionally drained. Both sets of parents have lost their savings and independence, because they lack long term care insurance.

After struggling with long term care for their parents, George and Joanne want to protect their kids from the financial and emotional burden of having to care for them in their old days. They realised they need a long term care insurance policy.

As George was sharing with me, he felt that if his and Joanne’s parents had a long term care policy, instead of creating this emotional and financial burden for the family, the policy would have paid for the care and help them maintain their independence.

Lesson learnt:
The greatest risk we will face in retirement is requiring long term care. Without long term care insurance, we are playing the wrong odds. What is really worrying George and Joanne is this fast approaching dark cloud of a $100,000 per person risk, for an average 5 years stay. How are they going to pay this amount when they still have to save for their retirement?

If you are 40 years old or older, long term care insurance builds a shield around your nest egg, protecting you and your family from that risk so you can enjoy spending quality time with each other in retirement. Your kids will be grateful they don’t have to worry about changing your diapers or giving you that uncomfortable sponge-bath, because you planned ahead.

If you have parents age 40 or above, long term care insurance will pay for the care of your parents at old age and help them maintain their independence. Most importantly, you don’t have to pay for long term care expenses such as Nursing Home fees and hiring a caregiver on your own.