Careshield seems to charge very high premium over a very long period. (47 years) . Aren’t there better private plan out there for disability insurance? - Seedly

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AMA Christopher Tan

Asked by Anonymous

Asked on 24 Jan 2019

Careshield seems to charge very high premium over a very long period. (47 years) . Aren’t there better private plan out there for disability insurance?

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Hi anonymous, thank you for your question and sorry for the late reply.

Essentially, both ElderShield and CareShield Life are severe disability insurances. For this kind of insurance, you can claim against it when you cannot perform 3 out 6 of the activities of daily living regardless of age, not after age 65.

ElderShield was launched in 2002 and when it was first launched, the coverage was only $300 per month for 5 years, Subsequently, an upgraded version, ESH400 pays $400 per month for 6 years. Eldershield was an opt out plan for all Singaporeans/PR when they reach 40 years old.

In 2018, the government introduced CareShield Life, the improved version of ElderShield. It will be officially launched in 2021 and all Singaporeans/PR from age 30 must participate. For those on exisiting ElderShield plans, they have a choice to switch. CareShield Life's premiums are higher generally because the benefits are higher. It pays $600 p.m for life when it is launched in 2021. This amount goes up every year.

Both ElderShield and CareShield Life are basic plans. If you want better coverage, you can buy the supplement from private insurers. Currently, only ElderShield Supplements are offered because CareShield Life is not launched yet.

I have written 3 articles on it - one of which for the Straits Times, you may find the articles useful in the answering of your question:

  1. https://www.providend.com/what-you-should-know-about-careshield-life-part-i/

  2. https://www.providend.com/what-you-should-know-about-careshield-life-part-ii/

  3. https://www.providend.com/a-singaporeans-help-singaporeans-scheme/

Hope this helps.

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Careshield is an upgraded version of Eldershield. Thats the first point.

(1) Careshield/Eldershield is only meant for disability that happen after 65 years old to help those who are disabled. Its more like to cope with increase cost due to disability.

As from https://www.cpf.gov.sg/Members/Schemes/schemes/healthcare/eldershield

Eldershield is a "basic financial protection to those who need long term care"

(2) Most other disability insurance are meant for income replacement when you are unable to work. These are for those who are still working (entry age is 16-60). They are strictly meant for income replacement. (if you wish to buy instead of critical illness coverage).

Hence they may appear to be the same, but their purpose (and thus use) is very different.

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Hariz Arthur Maloy
Hariz Arthur Maloy

26 Jan 2019

Careshield and Eldershield is for disability after 30 and 40 respectively. Not just after 65.
Loh Tat Tian
Loh Tat Tian

26 Jan 2019

Thanks for pointing that out. But it's best to think of them this way because of their functions.