Careshield Life Upgrade

Hi Zach,

I have personally upgraded my own CSL.

You can look at it this way. There are really only two options.

You choose not to buy the careshield life (CSL) supplement.

Life goes on. Two things happen.

1. You never need the payout because you lived a long and happy life. That's great. Medisave money continues to garner interest, spilling over to SA, etc, etc.

2. Something happens, and you need the payout. And that CSL payout is probably $1000/mth adjusted for inflation by the time you claim (let's say). That helps, but if that's 30 years down the road, you have to think about whether that is enough for things like nursing care, or even a maid to look after you. Financially the burden will fall on your family, as long as you need the care. And for how long, we won't really know.

You choose to buy the CSL supplement.

Again, life goes on. Two things happen.

1. You never need the payout because you lived a long and happy life. That's great. You'll just have lesser spill over from MA to SA, so lesser funds for retirement?

2. Something happens, and you need the payout. And that CSL payout with the supplement payout is probably like $2500/mth (an extra $18K/yr) adjusted for inflation by the time you claim (let's say). That is better than $1000/mth in the first scenario.

The risk of not buying, is just that if you have to claim, you will only have CSL to fall back on.

The risk of buying, is that if you don't claim, the premiums will just go to the insurer's risk pool to pay out to those who have to claim. That's how it works anyway.

You have to decide which you prefer.

Having said that, should you choose to upgrade, you have to decide if you prefer 2ADL (plus) or just stick with 3ADL. I went with 3ADL as I know my ECI plan pays on 2ADL, plus the chance of exactly 2ADL is statistically a lot lower than 3 or more ADL.

Your CSL supplement plan works on a separate MA withdrawal limit from your shield plans, and thus any premium less than $600/yr will be fully payable from CPF MA.

However, and I am going guess that you might not have been informed of this, CSL and CSL supplement plans are subject to GST. For CSL this is not an issue since the premiums are fully deductible from MA, but for CSL supplements, if say your premium is $590 @ 7% GST, and then GST goes up by 2%, you might exceed the $600/yr limit and you have to pay cash. This may be only $1 a year but if you forget to pay that $1, the plan lapses, and that would be a waste. So best to set up a GIRO (I did).

As long as you continue to work, it is unlikely that you will stretch your MA too much in terms of servicing the premiums. However, do check out your own MA numbers and do some maths if you are still worried.

Hi Zach,

I believe seedly had made a detailed comparison on careshield upgrade.

https://blog.seedly.sg/careshield-life-suppleme...

Probably you can have a good read there and made an informed decision then.

all the best.