Did you know that 50% of healthy Singaporeans over the age of 65 could become severely disabled , according to MOH.
CareShield Life was introduced on 27 May 2018. It is a plan that to replace the existing Eldeshield by year 2020. CareShield Life provides higher monthly payout ($600/month) for lifetime if the person unable to perform 3 activities of daily livings (ADLs), while existing Eldershield provides $400/month for 6 years. You can find out more about CareShield Life here and here.
I have received many comments on social media and from my clients, all of them carry different views. Here are my personal views on the new CareShield Life:
1. Voluntary change to Mandatory
For existing Eldershield arrangement, you will have the option to opt-out from the coverage. Based on my experience, only a small group of people will choose to opt-out. Most of them are confused about the Eldershield coverage. I believe that by making it as mandatory and with proper explanation, people will appreciate this change.
2. Entry age at 30 instead of at age 40
Personally, I agree with this change. By allowing individual to join at younger age will cover any medical conditions that may develop during their thirties. Similar to most of the insurance plans, entering at younger age should lower the cost of coverage.
3. Higher premium for higher and longer payout
I think the plan should allow individual to choose the premium and payout structure. Not everyone likes the idea of paying more for insurance. Although the payout received versus the premium paid for CareShield Life is higher than Eldershield, some may not see it as necessary. Especially for people who don’t have enough medisave.
4. Increasing payout structure
The payout from CareShield Life increases up to the point of claim. However, it remains fixed during the payout period. I find that the structure to be a bit complex. If the intention of increasing payout is to counteract for the higher long term care expenses due to inflation. Why not also allow them to increase the payout as well?
5. Careshield life enhancement?
Just like the existing Eldershield, where you can choose to get higher payout by getting Eldershield enhancement, I hope there will be a CareShield Life enhancement in the future. This will give individuals an option to upgrade their CareShield Life for better coverage.
Overall, I think the changes for CareShield Life is good. With longer life expectancy and advancement of medical treatment, one will certainly need a better coverage in the event of disability. You can find more information about the roles of insurance in your life journey over here.
Louis Koay is a dual-licensed representative at a top financial firm. He graduated from the National University of Singapore with First Class Honours and he is a CFA charterholder as well as a Certified Financial Planner. He is currently managing a team of 6 advisors and servicing more than 1,000 clients with asset under advisory of more than $20 million. As a trainer at Dr Wealth, Louis developed the Personal Finance Mastery Course and he is a key trainer in the Intelligent Investors Immersive Program. He has trained more than 10,000 retail investors in analysing stocks and on personal financial planning.