24 May 2022
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31 May 2022
Independent Financial Advisor at Phillip Securities (Jurong East)
There is NO overlap.
There are actually fundamental differences between disability income (DI) coverage and long term care coverage (LTC) via Careshield Life (CSL).
DI is meant to cover you during your active employment years and LTC is usually for when you're much older. DI mitigates loss of income from an inability to work and LTC helps to subsidise or defray the cost of nursing.
To claim DI requires that you that you cannot perform the material duties of your occupation while LTC claims are based on inability to perform the Activities Of Daily Living. It is however also easy to see why the lines have been blurred between these two types of plans. Suffering from the inability to perform ADL may in fact lead you to be unable to perform the material duties of your occupation.
However, a surgeon who lost a finger might be unable to perform surgical operations and suffer a loss of income, and yet not meet the CSL claim criteria.
Not every occupation requires DI coverage in my view. If you are very skilled by virtue of training, education or experience and cannot be easily replaced, then disability income may be a good thing to have.
However, everyone would need LTC as ageing is inevitable (and also why CSL is made compulsory). Nursing costs are only going to get significantly more expensive with increasing labour and healthcare costs and increasing longevity. CSL's base coverage of $600/mth, while planned to have an escalating payout over time, is already insufficient for a caregiver, and definitely grossly inadequate for nursing home bills.
This is where the supplement plans come in, to boost your payout amount in the event of a claim, so that it lessens the financial burden of the costs of LTC.
So in summary, they're different. If you aren't easily replaceable due to training, education, or experience, get covered with DI and the CSL supplement plan.
Lastly, please get a coverage amount that is in line with your needs. If you think you might want the option to get nursing home care, you're going to need easily $2K or more on top of Careshield Life.
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