You will be able to estimate healthcare and long-term care costs in later life.
When Jasmine's mother turned 80, her hospital plan premium arrived and Jasmine read it twice. It was several times what her mother had paid at 60, and it would keep climbing every few years. Her mother pays most of it from MediSave. The rider, which covers the part of the bill the main plan doesn't, comes out of cash. Jasmine realised her own plan had a healthcare line of S$5,000 a year at today's prices, growing at 5%, and she had no idea whether it was enough.
This lesson tests that line. Financial independence: planning the number and the path, module 7, covers the basics: lesson 7.2, Premiums rise with age, and lesson 7.3, Long-term care and the safety nets. Insurance Decoded, lesson 6.3, Long-term care: CareShield Life and what supplements add, covers the products. Here you put real numbers for your own later decades into your plan.
Hospital insurance in Singapore is layered. MediShield Life covers everyone for large bills in subsidised wards, with premiums that rise by age band and can be paid in full from MediSave. An Integrated Shield Plan adds private cover on top, for a higher ward class or a private hospital. A rider covers some or all of the deductible and co-insurance you would otherwise pay. CareShield Life, for long-term disability, has its own premiums, paid over a set period.
Each insurer publishes a premium table showing what each age band pays today. Find the table for your own plan and rider and read three rows: 65, 75 and 85.
Then account for two things. First, MediSave can pay MediShield Life premiums in full, but for the private part of an Integrated Shield Plan it can only pay up to a yearly limit that rises with age, set by the Ministry of Health. Anything above that limit, and every dollar of a rider, comes from cash. Check the current limits on the MOH or CPF website. Second, the table shows today's prices. Insurers reprice their plans every few years, so a premium for an 85-year-old in thirty years will be higher than today's 85-year-old pays. Grow each row by your healthcare growth rate.
Jasmine's table, using made-up figures for her plan and rider combined, shows about S$1,500 a year at 65, S$2,600 at 75 and S$3,600 at 85, at today's prices. Grown at 5% a year to the years she'll pay them, those become about S$2,400 at 65, S$6,900 at 75 and S$15,600 at 85.
Her healthcare line from lesson 1.4 is about S$13,300 at 75 and S$21,600 at 85. At 85, premiums alone would take nearly three quarters of it. What's left has to cover specialist visits, medicines for chronic conditions, dental work, hearing aids and spectacles. Her line is tight. It is not obviously wrong, but she now knows where it might break.
A hospital stay is a bill. Long-term care is a monthly cost with no end date. People who need help with daily activities, such as bathing, dressing or moving around, often need it for years, and the need becomes much more common in old age.
CareShield Life pays a monthly cash sum if you become severely disabled, for as long as the disability lasts. That sum helps. It is designed to help, not to pay the whole cost of care. The current benefit, the definition of severe disability and the premiums are on the CareShield Life website. Your plan should treat the benefit as an offset against care costs, and the gap as yours.
The Agency for Integrated Care, through its website, lists the main types of care in Singapore and the subsidies attached to each. The options run roughly from least to most intensive:
Home care services, such as nurses or therapists visiting your home Day care centres that look after older people during working hours A live-in helper at home, with the salary, levy, food and insurance that come with employing one Nursing homes, for people who need care around the clock
Each has a different cost, and subsidies for most of them are means-tested on household income, which the AIC site explains. Its cost estimates and subsidy calculators give a starting figure for your own situation.
Jasmine looked up two options. If she needed care at 85, she would want to stay at home with a live-in helper and some home nursing. Using made-up figures for this example, she put that at about S$3,000 a month at today's prices before any subsidy. She assumed a CareShield Life benefit and a modest subsidy would cover about S$1,000 of it. That leaves about S$2,000 a month at today's prices, or S$24,000 a year, as her own cost.
In future dollars at 85, with inflation at 2.5%, that is about S$50,000 a year. Her whole healthcare line at that age is about S$21,600. Care, if it comes, is the largest single cost in her plan.
Not everyone needs long-term care, and many who do need it only for a short time. It would be easy to plan for the average and move on. But your plan has to survive your own life, not the average one, and care is the kind of cost that can end a plan that looked safe.
A sensible approach is to treat care as a scenario, like those in module 5: assume it starts at a particular age and lasts until your planning age, and see whether the plan holds. Jasmine will do exactly that in lesson 6.4, Write your housing and care plan. Lesson 5.3, Living longer than you planned, already gave her the early warning: with S$2,000 a month of care from 85, her money ran out at 95 even in the central case.
For the activity, find your insurer's premium table and the AIC page for one care option you'd want, and turn both into yearly figures at the ages that matter.
List your expected premiums at 65, 75 and 85, and the monthly cost of one care option from the Agency for Integrated Care.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).