Are You Ready for CareShield Life

Singapore government is going to launch CareShield Life on 1 Oct 2020. I believe that many people between age 30 to 40 in 2020 should have received the following brochure by post. This article is an introduction on CareShield Life and its impact.

What Is CareShield Life

CareShield Life is a long-term care insurance scheme manged by Singapore government. The insured member can use CPF Medisave to pay the premium of the scheme. Generally speaking, if an insured member is severely disabled and not able to take care of oneself, he or she can claim the monthly payout benefit from CareShield Life. CareShield Life is an updated version of ElderShield, a long-term care insurance scheme advocated by Singapore government previously.

Who Will Be Affected

CareShield Life is for Singapore Citizens and Permanent Residents only. It is mandatory for Singapore Citizens and Permanent Residents born in 1980 or later.

If you are born after 1990 (aged below 30 in 2020), you will be automatically covered when you turn 30.

If you are born between 1980 to 1990 (aged 30 to 40 in 2020), you will be automatically covered on 1 Oct 2020 or when you turn 30, whichever is later.

If you are born in 1979 or earlier (aged 41 and above in 2020), participation is optional. You can apply to join CareShield Life from end-2021 onwards if you are not severely disabled.

What Are the Benefits of CareShield Life

CareShield Life provides lifetime coverage. If a person is severely disabled, the person will receive monthly payouts for as long as he or she remains severely disabled. And the coverage is worldwide.

In 2020, the monthly payout benchmark is $600. This benchmark increases every year. From 2020 to 2025, the increment is 2% per year. After 2025, premium adjustments will be recommended by an independent CareShield Life Council. For an insured member, the monthly payout benefit will be fixed as the benchmark in that year when the insured member reaches age 67 or when a successful claim is made, whichever earlier.

Let’s use the following examples to elaborate the monthly payout benefit. Assuming that Mr Ong, Ms Lee and Mr Teo are all age 30 in 2020, and they all join CareShield Life in 2020. After Mr Ong joining the plan, he is severely disabled in the same year. His monthly payout benefit will be fixed as the benchmark in 2020, which is $600. Ms Lee is severely disabled in 2021. Her monthly payout benefit will be fixed as the benchmark in 2021, which is $600 x 1.02 = $612. Assume that the benchmark increases by 2% every year. After 37 years, in 2057, the benchmark becomes $600 x (1.02)^37 = $1,248. That year Mr Teo will be age 67. From that year onwards, no matter when Mr Teo becomes severely disabled, his monthly payout benefit will be fixed as the benchmark in 2057, which is $1,248.

How Much Is The Premium

In general, the premiums for CareShield Life increases every year. The insured members pay the premiums using CPF Medisave.

If you are born in 1980 or later, when you join CareShield Life, the government will inform you the premium of the first year. From 2020 to 2025, the premium increases by 2% per year. After 2025, premium adjustments will be recommended by the independent CareShield Life Council. The premiums are paid until your age 67. Premiums are waived once you make a successful claim.

If you are born in 1979 or earlier, joining CareShield Life is optional. If you have been an ElderShield 400 policyholder consistently (never opted out, or upgraded from ElderShield 300), when you join CareShield Life, you only need to pay the Base Premium; if you don’t belong to this group of people, when you join CareShield Life, you need to pay a Catch-up Component on top of the Basic Premium. When you join CareShield Life, the government will inform you the Basic Premium of the first year. From 2020 to 2025, the Basic Premium increases by 2% per year. After 2025, Basic Premium adjustments will be recommended by the independent CareShield Life Council. If you join CareShield Life before age 59, the Basic Premium is paid until your age 67. If you join CareShield Life at age 59 or older, you need to pay the Basic Premium for 10 years. If you belong to the group of people who need to pay the Catch-up Component, when you join CareShield Life, the government will inform you the amount of the Catch-up Component. The Catch-up Component is fixed, and you need to pay it for 10 years. Premiums (including Basic Premium and Catch-up Component) are waived once you make a successful claim.

You may click here to find out the first-year premium for different groups of people when they join CareShield Life.

How to Make a Claim

The definition of severely disability under CareShield Life is being not able to perform at least three out of the six Activities of Daily Living (ADLs). The six ADLs are: Transferring, Walking or Moving Around, Toileting, Washing, Dressing and Feeding. The definition is the same as that under ElderShield.

If an insured member is severely disabled, he or she needs to arrange with a MOH-accredited severe disability assessor for an assessment. The claim processing time is about one month. Once the claim is approved, the monthly payout benefit will be transferred to the insured member’s bank account automatically.

My sharing about CareShield Life ends here. If you have any relevant questions, welcome contacting me for a discussion.