Explain what CareShield Life pays and what private supplements can add to it.
If you lose the ability to look after yourself, someone has to wash you, dress you, help you eat and move you from bed to chair. Long-term care is the cost of that help with daily life, and it can go on for years. It is a different risk from the others in this course. It isn't a hospital bill, a diagnosis or a lost salary. When no insurance or savings have been set aside for it, the family pays. Children, spouses and siblings cover it in cash and in their own time.
Mei's grandmother had a stroke at 79. She survived but can no longer wash, dress or move from bed to chair without help. The family hired a live-in helper, arranged day care three times a week and fitted grab bars and a ramp at home. Most of her hospital stay was covered. Since then her children have paid for her care every month, and nobody knows when it will end.
CareShield Life is Singapore's national long-term care insurance scheme. The CPF Board runs it under rules set by MOH. While you are severely disabled it pays you a monthly cash benefit, for life if necessary. You can spend that cash on any care cost, including a helper, day care, a nursing home or equipment.
Disability is measured by activities of daily living, usually shortened to ADLs. There are six: washing, dressing, feeding, toileting, walking or moving around, and transferring (for example from bed to chair). CareShield Life pays when you cannot do a set number of ADLs without help. The threshold is strict on purpose. A frail person who can still manage most ADLs will not qualify.
Your coverage depends on your year of birth and your residency. Many citizens and permanent residents are covered automatically from a set age, and some older residents could choose to join. The premiums can be paid in full from MediSave. The government sets the monthly payout, the premiums, the disability threshold and the eligibility rules, and it reviews all four. Figures you have heard from friends may be out of date, so check the current details on the CareShield Life website.
Some older residents are on ElderShield, the scheme CareShield Life replaced. ElderShield pays a lower monthly amount and only for a limited number of years. If you help your parents with their finances, find out which scheme each of them is on. That tells you how much they would get and for how long.
CareShield Life gives everyone a basic floor. The payout is designed to help with care costs, and on its own it won't cover all of them. Because the ADL test is strict, it only pays for disability that is severe and lasting.
It also doesn't protect your income. Lesson 4.3 of The Singapore personal finance system, end to end, "Critical illness and disability income cover", showed that CareShield Life pays nothing to someone who can't work but can still wash and dress. Take a 35-year-old (an invented case) who is injured and can't work for two years. They can still wash and dress, so they get nothing from CareShield Life. Lost income from being unable to work is covered by disability income insurance, which lessons 6.1 and 6.2 teach.
Approved private insurers sell CareShield Life supplements, which sit on top of the national scheme. Depending on the plan, a supplement can add:
a higher monthly payout than CareShield Life pays alone payouts at a lower level of disability, such as when you need help with fewer ADLs extra features, such as a lump sum on your first claim or support while your disability is less severe
Each supplement has its own definitions, premiums and limits, so read each plan's terms before comparing prices. Part of the premium can usually come from MediSave, up to a yearly limit, with the rest paid in cash. Check the current limit with the CPF Board. Premiums often stop at a set age while the cover continues for life, so add up the total you would pay over the years as well as the yearly figure.
Supplements are underwritten. The insurer reviews your health before accepting you, so it's easier to get one while you're healthy. Your CareShield Life cover continues either way, so if you drop a supplement later you only lose the extra cover.
You need three numbers before you can judge a supplement. The first is what care would likely cost you each month. The second is what CareShield Life would pay. The third is how much your family could realistically cover from savings, CPF payouts or from each other.
Jun Hao pictures care at home with a helper and day care. He estimates it at S$3,000 a month, an example figure. He looks up his CareShield Life payout on the website, and his gap is S$3,000 minus that payout. He then works out how much of the gap his family could cover from savings, CPF payouts or each other. After that he looks at a supplement. Say it pays an extra S$1,200 a month. That would shrink his gap by S$1,200. Whether it's worth the premium depends on how large the remaining gap is, and whether Elise and Mei would end up paying it if he didn't insure.
Keep the question narrow: once you count the national floor and what your family could cover, is there a gap left that's worth insuring? Lesson 5.2 of Money as a couple and a family, "What care costs and the support schemes to check", covers how Singapore families share the long-term care load. The Agency for Integrated Care keeps a list of the support schemes available. The Retirement & Estate course goes further into planning care costs for later life.
For the activity, start on the CareShield Life website and check whether you are covered by CareShield Life or ElderShield. Then write down the monthly amount you think long-term care would cost you. Base it on a care setting you'd actually want, at home or in a nursing home, and on today's prices.
Write down whether you are covered by CareShield Life or ElderShield, and roughly what long-term care would cost you each month.
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