Why You Should Plan For Long-Term Old Age Care, Even If You’re Young

This was originally posted on Planner Bee.

Singapore’s citizens are living longer lives. This increases the need for long-term care as the risk of disability and serious illness increases in old age.

Singapore’s Ministry of Health estimates half of Singaporeans over the age of 65 could become severely disabled in their lifetime. Of these, three in 10 could live with severe disability for 10 years or more.

These disabilities could come from accidents or illnesses, leading to the need for long-term care over a prolonged period.

What is long-term care?

Long-term care refers to the personal and medical care needed when an individual suffers from a disability. There are different types of long-term care:

• Home-based care
• Centre-based care
• Nursing homes

Since 1 Oct 2020, CPF launched a mandatory national insurance scheme called CareShield Life.

Read more: All You Need to Know About CareShield Life

Those who were born between 1980 and 1990 (aged 31 to 41 in 2021) were automatically covered on 1 Oct 2020 or when they turned 30, whichever is later, regardless of pre-existing medical conditions and disability.

If you are born between 1970 to 1979, insured under ElderShield 400, and have not developed severe disability, you have been automatically enrolled onto CareShield Life from 1 December 2021.

What are the benefits of CareShield Life?

CareShield Life benefits are designed to provide you with lifetime coverage for your basic long-term care needs, should you suffer severe disability. These benefits are:

• Lifetime worldwide coverage
• Lifetime monthly cash payouts as long as you are severely disabled
• Monthly cash payouts will start at S$600 in 2020 and increase over time

The claim will be paid out as long as an individual is assessed (by a MOH-accredited severe disability assessor) to be unable to perform at least three of the six Activities of Daily Living (ADLs).

The 6 Activities of Daily Living

Source: MOH website

Is the payout from CareShield Life sufficient to meet your needs?

According to Singlife’s Long-term Care Study done in 2018, you may need an average of S$2,324 per month for the following:

_Source: Singlife website

1. Source: Singlife’s Long-term Care Study 2018.

2. Source: Ministry of Health, Long Term Care Financing, retrieved on 6 April 2020 from https://www.careshieldlife.gov.sg/long-term-care/planning-ahead.html._

According to Today, a United Nations report expects Singapore’s population size to reach 6.34 million in 2030.

It found that the life expectancy of Singaporeans will continue to go up. The life expectancies for men and women born in Singapore between 2010 and 2015 are 80.1 and 84.5, respectively. These would increase to 85.6 and 89.3 years respectively for those born here between 2045 and 2050.

With increasing costs in our living expenses including medical care, you must plan early to take care of these costs so that it will not be a financial burden to you and your family.

What can you do to supplement CareShield Life?

There are CareShield supplementary plans offered by private insurance companies to provide additional monthly cash payouts.

How do you know if you are covered under a supplementary plan?

If you are unsure whether you have a supplementary plan, you may check the CPF Board’s website by following these steps:

1. Visit the CPF website.
2. Log in using your Singpass.
3. Hover over “my cpf” and click on “Healthcare” under “My dashboards”.
4. Click on “Long-term care insurance” on the anchor links or scroll down to the “Long-term care insurance” section.

If you have a supplementary plan, this section will show your insurer, i.e. Singlife, Great Eastern or Income. Do contact your insurer to find out which plan you are covered under.

If you do not have any supplementary plan, this section will not reflect any information.

You can utilise up to S$600 per year per life from your CPF Medisave to pay for the CareShield Life Supplement Plan. If there is an excess of premiums beyond S$600, the remaining will be payable in cash.

Some examples of insurance companies providing such plans in Singapore are Income, Singlife, and Great Eastern.

Let’s take a look at what they provide.

Premium comparisons based on at least 2 ADLs

Based on Age 30

Based on Age 35

*All in Singapore dollars

However, if you feel that going for a CareShield Life Supplement that pays out when the insured is unable to perform 3 out of 6 ADLs, the same as how CareShield Life pays out, you can consider the following examples.

Premium comparisons based on at least 3 ADLs

Based on Age 30

Based on Age 35

*All in Singapore dollars

• Singlife selected premium payment term is till age 99
• Income selected premium payment term is till age 84
• Great Eastern selected premium payment term is till age 95
• Singlife offers a 20% perpetual discount and rates quoted are after discount
• Great Eastern offers a 20% perpetual discount and rates quoted are after discount
• Premiums above are inclusive of the prevailing GST

Read more: Best CareShield Life Supplements

Conclusion

You’re never too young to plan for this, even if you’re covered by other insurance policies.

People who plan early will enjoy additional peace of mind and, perhaps more importantly, a lower entry premium into the CareShield Life Supplement Plan.

Don’t leave the financial risk to your loved ones.