What is CareShield Life?

Hi anon,

CareShield Life is a compulsory long-term care scheme administered by the Singapore government.

It was launched in October 2020 to provide lifetime cash payouts should you one day be unable to perform at least three out of six Activities of Daily Living (ADLs) and require physical assistance with these.

The ADLs are: transferring, walking or moving around, toileting, bathing, dressing and feeding or eating. Pause for a moment. These are what we do every day, from the moment we jump out of bed! We would probably accomplish all within 30 minutes of waking up – unless you are the type to skip breakfast.

Payouts start at S$600/month in 2020. They will increase annually until you turn 67 or when a claim is made, whichever is earlier. The rate of increase has been set at 2% per year until 2025. It will be reviewed after that. Premiums increase accordingly but are fully payable with your CPF Medisave Account.

CareShield Life is basically the next iteration of ElderShield. ElderShield was introduced in 2002 to cover those born in or before 1979. CareShield Life is an improved version in the following ways:

1. Its payouts are higher, in response to rising costs in Singapore of getting appropriate care and inflation

2. It covers you for a lifetime, to give your family peace of mind that you would have some financial support for as long as you live

3. Its entry age is lower, to ensure that more people are covered when they are younger and less likely to have pre-existing health conditions

However, the payout amount is rather low. $600/mth in today's context, is barely enough for a maid, let alone nursing home care. Even with the 2% escalation in payouts, we're looking at maybe a ~$1200/mth payout after age 67, 37 years from now (assuming you are now 30 years old). By then, costs would have increased from today as well. We're really just playing catch up.

Thus, getting your CSL payout increased with a supplement plan (say, another $1000/mth extra on top of CSL) will ensure that you at least have $2000/mth if something happens after age 67. While that may not be enough by then, it is definitely a step up from $1000/mth. More importantly, if you are young and healthy now, you won't have any issues getting the suppplement plan, because you are still insurable. When chronic conditions like diabetes sets in, you won't be able to get any supplementary coverage at all.

In conclusion, I highly encourage you to exercise your option to increase your payout now, when you are still young and healthy. Medisave can be used for this (up to $600/yr) which won't impact your cashflow, even if finances are tight.

Hi,

CareShield Life is a long-term care insurance scheme, that is made compulsory for Singaporeans aged 30 and above, to provide basic financial support should Singaporeans become severely disabled based on the ability to perform 6 Activities of Daily Living (ADLs). The 6 activities are Washing, Dressing, Feeding, Toileting, Walking or Moving around and Transferring from a bed to an upright chair or wheelchair, and vice versa.

CareShield Life will start providing payouts of $600 upon 3 or more ADLs for life and the premiums are fully payable using Medisave. The potential payouts will increase every year by 2% till age 67 or upon a claim but regardless, the payout amount is still considered quite low. The cost of a home-based care services ranges from around $800 to $1,000 a month while a centre-care services ranges from around $1,000 to $1,500. Hence, there is still a need to take up additional coverage (comprehensive CareShield Life). Besides, there is a $600 Medisave Withdrawal Limit that can be used to pay for the premium of the comprehensive CareShield Life policy.

You could consider opting for Great Eastern’s Great CareShield Life. With Great CareShield Life, upon 1 ADL, one lump sum of 3 times the monthly benefit will be paid out and all subsequent premiums will be waived. Upon 2 ADLs, 100% monthly benefit will be paid out as long as the life assured continues to suffer from the number of disabilities. Premiums are levelled based on entry age.

With the $600 Medisave Withdrawal Limit, the monthly benefit for a male aged 35 is at $1,200 under Great CareShield Life. So for example, upon 1 ADL, the premium for Great CareShield Life will be waived. Upon 2 ADLS, he will start getting a payout of $1,200 per month. Upon 3 ADLs, the government’s CareShield Life will then start paying out the $600+, meaning he will get $1,800+ per month.

Feel free to contact me (email at bio) if you are interested to find out more.

Cheers.