10 Candid facts about CareShield Life that you need to care about
CareShield Life is the replacement to our existing ElderShield plan, both of which are meant to provide financial payouts if someone is severely disabled.
Launched in mid 2018 – there has been quite a stir caused by this government initiated plan for quite a number of reasons.
Because plowing through lengthy articles and complicated explanations are not everyone’s idea of fun, here is our take on the top ten facts that you need to know about CareShield Life.
Warning: Some humour involved, so watch it if you are sipping a hot beverage while reading.
1. You don’t have a say in the matter
Yup. Unlike its predecessor (ElderShield), CareShield Life is automatically enrolled for you if you are born on or after 1980. The program begins in 2020, where everyone born on or after 1980 start to pay premiums on the plan.
2. Women have to pay more in premiums
Approximately 20% more than their male counterparts of the same age.
Feminists are all up in arms about this, but the Senior Minister for the State of Health (Dr Amy Khor) explains that “it was not an easy decision to make” but females tend to “live longer than men” and are more likely to remain in a disability for a longer period (compared to men in older ages)
This has invoked a fierce reaction in the online (presumably female dominated) community who decry the unfairness of the whole situation.
3. No Singaporean left behind
Moving on to a more heart warming point – the reason for compulsory enrollment of the whole nation is to pool together everybody’s risk, and hence spreading it out (the cost) evenly. (Females have every right to disagree, but you get what I mean)
This ensures that even Singaporeans with pre-existing disabilities / conditions can be covered under this plan. Undoubtedly they may have to pay more in premiums, but the coverage will still be made available to them.
4. Coverage has been increased, both in payout and duration
CareShield Life will increase in basic coverage to $600 a month, and payouts will continue for life (or as long as the policyholder remains severely disabled)
For reference, the current versions of Eldershield come in 2 flavors: $300 or $400 a month in payouts.
Imaginatively called Eldershield300 and Eldershield400, their maximum payout durations are 60 and 72 months respectively.
5. You can use MediSave to pay for 100% of premiums
As least that is what the dear Ministry says. For now.
6. Premiums and payout are to be adjusted periodically
By adjusted, we mean increased.
That kinds of means good news. We think so anyway.
When the program rolls out in 2020, the premiums and monthly payouts will increase by 2% yearly for the next 5 years, after which the smart folks administering this program will turn on their actuarial calculators to determine what premiums/payouts are sustainable.
7. Premiums are paid from age 30 till age 67
Assuming you are a person who turns 30 in 2020, you will pay CareShield Life premiums till you turn 67. For a person who is older than 30 (say 35) in 2020, he or she will pay premiums till 67 as well, but the amounts will ostensibly be higher.
For comparison, the existing ElderShield program has people paying from age 40 till age 65.
From the official CareShield Life page:
Starting the CareShield Life premium payment duration at age 30, and ending at age 67, lengthens the premium payment duration. A longer duration of premium payment allows policyholders to spread premium payment over more years, so as to reduce annual premiums payable.
The premium payment end age will be set taking into account any changes to the re-employment age in future. Ample notice will be given to cohorts who are affected by any changes to the premium payment end age.
8. Payouts stop increasing after age 67
After age 67, the final payout per month ceases to increase, and the policyholder also does not have to pay any more premiums. He or she will then enjoy cover for life.
For example, if by age 67, my final monthly payout is set at $900, then that will be the amount I receive monthly should I fulfill the disability criteria.
9. It is administered by the Zhenghu (government), on a not-for-profit basis
We can whole-heartedly believe in the administration bit. As for the not for profit portion, we haven’t had a chance to examine their books yet. So we’ll just take their word for it.
There are a number of articles that delve into current stats of ElderShield that argue “not for profit” is loosely interpreted, to put it mildly.
Personally I don’t really care, since political apathy runs deep in me.
10. Severe Disability keeps its original definition
To qualify for payouts under CareShield Life and ElderShield, the requirements remain unchanged:
A person requires assistance for at least 3 out of 6 specified ADLs (Activities of Daily Living)
These 6 activities are deemed crucial to independent (unassisted) daily living and a person who is unable to perform (at least 3) out of 6 of them is deemed to be severely disabled.
Bonus Fact: Insurance still suffers from lack of naming creativity. And consistency for that matter
Follow my thread of thought here, I swear its worth it.
ElderShield = Something that protects the elderly, like a shield. Ok we get it.
MediShield = Something that protects us against Medical bills? Ok we get it.
But both are fundamentally different plans, with very different payout structures. One is a long term care plan, the other is a hospitalization plan. Why follow a similar naming structure?
Now throw this into the mix: CareShield Life = Something that cares and protects you for life?
Come on guys. Seriously?
If this isn’t confusing enough, what do you think CPF Life will invoke?
I rest my case.
Did we miss out any other important points about CareShield Life?
Let us know in the comments below. Do share if you have better naming conventions for all these plans as well, someone up there in the Ministry could use some assistance in the creativity department.
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.
Should we have enough energy some day, we dream of running courses for Insurers and Health Ministries to help them name their products better.
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