Describe what CareShield Life and the national safety nets cover, and what they leave you to pay.
CareShield Life pays a fixed monthly sum if you become severely disabled, and care often costs more than that sum. Check what you are entitled to, then decide on paper how you would pay the difference.
Lesson 7.2, "Premiums rise with age", looked at hospital insurance. A hospital stay finishes when you are discharged. Long-term care is ongoing support for someone who can no longer manage daily life on their own, and it shows up as a monthly outflow with no end date. Think of a parent who now needs a hand to bathe or get dressed, or a person whose stroke means a caregiver has to be there every day for years.
CareShield Life is the national long-term care insurance scheme in Singapore. If you become severely disabled, it pays you a cash benefit each month and keeps paying while the disability continues, for life if need be. Severe disability generally refers to needing help with a set number of basic daily activities, for example washing, dressing and moving around.
Whether you are in the scheme depends mainly on when you were born and your residency. A lot of younger Singapore Citizens and Permanent Residents were enrolled automatically. People in older cohorts may have been given the option to join. You can use MediSave for the premiums. Go to the CareShield Life website for the current eligibility criteria, the official definition of severe disability, the premium and the size of the monthly benefit, and check your own record there instead of guessing.
For planning, keep two points in view. Premiums are paid over a set period, and like any premium they belong in your list of costs. The payout is a fixed amount each month, and it does not rise to match whatever your care ends up costing.
The scheme was built to help with care costs, and it stops short of covering them fully. A helper or part-time caregiver at home, a day care centre, or a nursing home bed can each cost well above the monthly benefit, and the bill depends on how much care is needed and where it happens. The amount left over is the gap, and it may run for years. If your plan treats the benefit as the whole answer, it will probably come up short at the point your household is least able to absorb an unexpected cost.
There are three usual ways to cover the gap: your own savings, which is one more reason to hold a margin in the long-term part of your number; a private supplement on top of CareShield Life; and family. Which combination suits you depends on your health, your family and what you want. Supplements are covered properly in the Insurance Decoded course, and long-term care planning in the Retirement & Estate course.
If someone cannot pay for care, Singapore has help in place. MediFund, an endowment fund, assists needy patients with medical bills they still cannot meet after subsidies, insurance and MediSave. Government subsidies for long-term care services are means-tested, which means the support depends on household income and assets: lower income and fewer assets bring more help. Using this support when you need it is nothing to be ashamed of.
Building your plan around it is another matter, for two reasons. Means-tested help is aimed at people with limited resources, and if you have built a financial independence portfolio you may qualify for little of it. Depending on a safety net also narrows what you can choose: which provider, which setting, and whether you get to remain at home. Knowing that help exists does not answer the planning question. That question is what you would do with your own resources if you needed care.
Priya, 34, whom you met in earlier modules, works through it with made-up figures. On the CareShield Life website she confirms she is covered, which fits her age and citizenship. The premiums are deducted from her MediSave for a set number of years, so she records them in her plan as a cost.
Next comes the harder part. She imagines needing long-term care at 70 and decides she would want to remain in her flat, with a part-time caregiver coming in. The CareShield Life benefit would meet part of that bill. Her portfolio would pay the remainder, and by that age it only needs to cover the gap above CPF LIFE. She decides that if care is needed, all her flexible spending stops. In her base plan that is S$15,500 a year at today's prices. If that is still not enough, she will use the margin in her long-term figure.
One question goes on her list for later: would a private supplement be worth its premium for her? That belongs with an adviser and with Insurance Decoded, outside this course. Her answer has rough edges, but it is on paper and it ties the risk to a particular part of her plan.
Your own version follows the same sequence. Confirm your status on the CareShield Life website, and enter the premium in your plan along with how it is paid and for how many years. Choose a believable scenario, with an age and the kind of care setting you would want. Assume the benefit pays only some of the cost, then name which of your own resources would pay the rest. That might be your portfolio, stopping flexible spending, or your long-term margin. List anything unresolved, such as whether a supplement is worth its premium, to take to an adviser or the relevant course. Finally, write the answer down and attach it to a specific part of your plan.
Before the activity, look up your own CareShield Life status. Then think about the situation it describes honestly, because the activity asks what you would actually do.
Write down whether CareShield Life covers you, and what you would do if you needed long-term care at 70.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).