The Complete Guide 
Health Minister Gan Kim Yong calls CareShield Life the MOST difficult healthcare scheme to explain to public.
I can understand why.
It’s more complicated than it’s predecessor, ElderShield.
And it’s structured in a way that would upset Singaporeans at first glance. (compulsory…higher premiums…longer payment term…)
So in this guide, I’ll reveal everything you need to know about the new long-term care insurance scheme, CareShield Life, and help you understand how this change will affect you.
Let’s dive right in!
- What is the CareShield Life scheme in a Few Sentences.
- Am I Automatically Enrolled into CareShield Life?
Since You Can’t Opt Out,Learn Why CareShield Life is Not That Bad After All
- CareShield Life vs ElderShield (which is better?)
- Wait … I have MediShield Life, Why do I even need CareShield Life?
- CareShield Life Benefits & Features (Payout, premium & incentives)
- What are your Options?
What is the CareShield Life scheme in a Few Sentences?
CareShield Life is a basic long-term care insurance scheme for Singaporeans and Permanent Residents. It supports you at old age by providing a stream of income upon severe disability.
Unlike the existing Eldershield scheme, CareShield Life is administered by the Ministry of Health Singapore. So it’s like MediShield Life. You pay premiums and receive payout directly from the Government.
And yes, Careshield life premiums are fully payable by Medisave.
thAm I Automatically Enrolled into CareShield Life?
Yes, you will enroll and receive long-term care coverage automatically as soon as you turn 30 years old.
But since CareShield Life is launching soon, those who have the existing Eldershield scheme may have a chance to join CareShield Life.
Let’s see how the new launch will affect you:
Born between 1990 ~ 1980
When it launches in mid 2020, you’ll receive a welcome letter from the new scheme and be enrolled into the new long-term care insurance scheme.
Born in 1979 ~ 1970
You already have ElderShield.
But the Government will still sign you up for CareShield Life to “make it more convenient to join CareShield life” (MOH).
So if you don’t want it and wish to stick with the existi ElderShield scheme, opt out by 31 Dec 2023 and receive a full refund of the premiums paid.
Born 1969 or earlier
Since you already have ElderShield for quite some time, you won’t be required to join CareShield Life.
However, you can switch over if you wish, starting from mid 2021.
Born 1991 or later
Relax! Your time will come to join the CareShield Life family, and receive long-term care coverage. Wait until you’re 30 to receive the enrollment letter.
Since You Can’t Opt Out, Learn Why CareShield Life is Not That Bad After All
Like MediShield Life, we can’t opt out of it.
Maybe that’s why it has the word “Life” in it.
We have it for “Life”
So instead of lamenting over the change, in this section we’ll focus on why CareShield Life may actually be beneficial for us…
And since MOH says “healthy Singaporeans”, does that mean “less healthy” Singaporeans will have a higher chance of becoming severely disabled?
Okay, but 50%… Are you sure?
Here’s a short video from MOH, explaining how they arrived at the figures:
But if a person becomes severely disabled at old age, how long can he or she lives?
Here’s what I found out
“3 in 10 Singaporeans will live a decade or more after they become severely disabled” – by TODAYonline
And with healthcare advancement, we can expect people who are severely disabled to live even longer at old age.
2. Long-Term Care is Expensive
Aviva did a study in 2018 and found that the average amount needed for long-term care is $2,324 per month.
That’s actually a lot considering the fact that most claims are made during the silver years, when there’s no longer income coming in.
Here’s the kicker.
It’s $2,324 per month in today’s dollar, before accounting for inflation!
Then how much would it be after factoring inflation?
To calculate this, we need a starting age and a claim age.
Let’s make up an example…
Jessica is 40 years old (starting age) and will need long-term care when she’s 75 years old (claim age).
We’ll use 3.15% as the inflation rate.
And the final amount after adjusting for inflation is…
$6,881.12 per month!
Not as affordable as we think, right?
Yes, long-term care will only become more expensive.
And in comparison, the payout from CareShield Life ($600) looks tiny.
3. Able to Depend on Oneself
Now that you’ve seen how much long-term care actually cost.
I want you to imagine a scenario…
Let’s say critical illness strikes, all our savings are wiped out for medical use, and we need long-term care.
How are we going to afford the expenses and treatment?
Perhaps we can seek social assistance.
Or we can turn to our children and family members for help.
But with CareShield Life, at least we can get some additional income coming in to help with severe disability.
There’s this old saying…
4. One Year to Recoup Careshield life Premiums
Let’s go back to Jessica’s example.
Instead of 40 years old, let’s say she started paying premiums at age 30, and pays until age 67 (same for everyone).
And let’s also assume that she didn’t receive any premium subsidies from MOH (which we’ll receive when CareShield Life launches)
With a larger premium amount than all of us, how long will she take to recoup her money if she becomes severely disabled?
Let’s find out!
Total Careshield life premiums paid from age 30 ~ 67: $13,670*
Payout per month: $1,248.41*
Payout per year: $1,248 x 12 = $14,976*
(*Figures are estimated. MOH says that Careshield life payout may increase over time until age 67 starting from $600 per month. So we assumed a 2% annual increase, which is the same assumption MOH made for their calculations)
With only one year of payout and Jessica is able to recoup 37 years of CareShield Life premium!
But of course, it’ll be even better if we stay healthy and not become severely disabled.
5. Use Medisave, Not Cash
Imagine we have to pay CareShield Life in cash.
Perhaps we’ll see people coming together at Hong Lim Park to protest…
But no, all future Careshield life premiums are FULLY payable by Medisave.
If fact, Medisave is made for such use cases like long-term care.
CareShield Life vs Eldershield
They both serve the same function — Giving support when a person is severely disabled.
But which has better long-term care coverage?
And if you already have Eldershield, should you switch over?
First, let’s go over the similarities and differences.
Both CareShield Life & ElderShield…
-Supports long-term care
-Covers severe disability
-Has the same claim definition
– Protects us for life
-Are paid using Medisave
Yeah… that’s about it.
While they both look similar and have the same objectives, the foundation that make up both schemes are different.
|Total Estimated premium||$13,670*||$5,750*|
|Total Estimated payout||$89,856* (based on 6 yrs)||$28,800*|
|Return on Est.Premium||557%||400%|
|Payout Duration||Lifetime||6 years|
|Payout Amount||$600 / month||$400 / month|
|Payout Increment||2% / year*||0|
|Premium starts at||30 y.o||40 y.o|
|Premium stops at||67 y.o||65 y.o|
|Total premium years||37 yrs||25 yrs|
*The payout increment for CareShield Life is 2% for the first 5 years and will be adjusted accordingly going forward. This calculation assumes a minimum 2% increment throughout the payment period.
*Premium and Payout calculations are estimates only and may not be reflective of what Singapore citizens and Permanent residents will be paying or getting. For more info, please visit www.cpf.com.
Boring… Just tell me which is better!
Ready for the answer that will make you roll your eyes?
We all have different care needs, so there’s really no-one-size-fits-all answer here.
If you want more control over your long-term care insurance, then it’s probably Eldershield.
You can opt out any time you want, and replace it with a private plan if you like to.
Okay… But which is more “worth it”?
Based on the calculations in the comparison table, it’s going to be CareShield Life — because you get a higher return on premiums paid.
And for sure, CareShield Life is the more advanced one…
1) It recognizes the fact that inflation devalues our money, and that’s why the payout increases by 2% every year.
This is to ensure that by the time we actually need the money for long-term care, the payout amount will not be too low.
2) It understands that life expectancy and healthcare technology is only going to improve, that’s why it has a lifetime payout duration
So no matter how long you live, even if you outlive your savings, you’ll be able to make use of cash payouts from CareShield Life to pay for long-term care expenses.
Wait … I have MediShield Life, Why do I even need Careshield Life?
They both serve a different function.
I would even say that they actually complements each other.
CareShield Life protects you from the ongoing cost of long-term care.
On the other hand, MediShield Life protects you against expensive medical treatments that may wipe out life savings.
Let’s say a person recovers from cancer but is severely disabled.
Both MediShield Life and Integrated Shield Plan, will help to cover part of the MASSIVE hospitalization bills.
And after discharge, CareShield Life will kick in to provide monthly allowance to support the patients who need long-term care.
There’s no conflict in coverage between the two schemes.
in fact, they complement each other pretty well.
CareShield Life Features
I’ve added this section to showcase ALL the features of Careshield Life in one place.
Let’s start off with the tagline:
“Caring for you, for Life”
1. How to Claim?
A patient will be able to make a successful claim when he or she is severely disabled — unable to perform 3 out of 6 activities of daily living (ADL)
And of course, he or she must be certified by a qualified healthcare worker such as a doctor or nurse.
.2. No one will ever lose coverage
The Government guarantees this.
And will pay the shortfall for anyone who cannot afford Careshield life premiums even after the Government subsidies.
3. CareShield Life Upgrade/ Enhancements/ Supplements
There’s no way to upgrade now. But this option will likely be available for us to improve the long-term care insurance coverage at a later date.
Like MediShield Life and ElderShield, we can choose to upgrade with private insurers.
4. Covers pre-existing illnesses
That means people who have high blood pressure, high cholesterol or even diabetes are welcome to join CareShield Life and get long-term care insurance.
5. Covers people who are already severely disabled
Applicable only to those who join Careshield life or the Eldershield scheme for the first time.
Simply pay the first premium to join, and receive monthly payout the same year.
6. Mandatory & Auto-enrollment
We will not be able to opt out like the basic Eldershield.
7. Administered by the Singapore Government
CareShield Life will be run by the Ministry of Health Singapore.
8. Join CareShield life at age 30
Start paying Careshield life premiums and receive long-term care coverage at age 30.
9. Stop payment at age 67
This corresponds to the current re-employment age (And may increase over time). Even if the payment stops, the coverage for severe disability is for lifetime.
10. Lifetime Coverage
Most private insurers for long-term care only covers up to age 60/70. CareShield Life is one of the few that offers lifetime long-term care insurance.
11. Lifetime Cash Payouts
Persons who are severely disabled will be able to receive payout for as long as he or she lives.
12. Payout starts at $600 and increases by 2% per year.
As mentioned above, this is to combat inflation. The amount may be revised after 2025 depending on the economic environment
13. Careshield life Premiums fully payable by Medisave
There is no cash needed. (unless you choose to upgrade with private insurers)
14. Three types of Premium Subsidies/ Incentives
Subsidy based on Income
up to 30% off.
$30 ~ $250 off.
Participation Incentive for those born in 1979 or earlier
$500 ~ $4,000 (to offset premium).
note: PRs will receive 50% of the Government subsidies.
For more details about premium, subsidies & Incentives visit MOH website here
What Are Your Options?
At this point you’ve probably already decided if CareShield Life is right for you.
So what are your options?
For those born 1980 or later, Careshield Life is compulsory for you.
But if you are born in 1979 or earlier, you have 4 options:
1) Opt out of ElderShield, without switching to CareShield Life
2) Stay on ElderShield, without switching to CareShield Life.
3) Switch to CareShield Life (and cancel Eldershield)
4) Upgrade Eldershield AND switch to CareShield Life
and maybe number (5)… upgrade Eldershield, switch to Careshield Life AND Upgrade CareShield Life when it releases 😉
But if you choose option 4 — upgrade ElderShield and switch to CareShield Life, you’ll be able to claim from BOTH plans upon severe disability.
Wait… Why would anyone get option (4) or option (5) even if it’s possible?
Because the payout for the basic scheme is low — $600 per month.
So why not make use of Medisave to beef up your long-term care coverage and get Cash payout?
Before you do that, make sure you have enough monies in Medisave and it’s suitable for your care needs.
Update: MOH confirmed that option 5 is possible. You’re able to claim from ElderShield Supplement + CareShield Life + CareShield Life Supplement.
CareShield Life is like Eldershield 2.0 and is clearly more advanced and well-thought out.
Sure there are things that some of us might not like, like having to start 10 years earlier, higher premium amount and more…
But in all fairness, CareShield Life gives us higher payout that will increase over time.
And if you have seen our calculations above, the return on premium (%) is actually higher than those of Eldershield.
Love it or hate it, CareShield Life is here to stay.
So make sure you understand how it works today.
Is there anything I missed out? Tell me in the comments section below the FAQ.
Frequently Asked Questions
What can I use the monthly payout for?
I opted out of Eldershield and was rejected when trying to apply for it again, can I join CareShield Life?
The Government relaxed the underwriting criteria to allow more Singaporeans to have coverage.
And if you are joining for the first time, you’ll get accepted even if you are already severely disabled.
I'm a Singapore citizen who lives overseas and have no intention of coming back. Can I opt out?
Unfortunately, no. But you can make a claim upon severe disability even if you are overseas.
Can I pay the entire premium in one lump sum?
Is the disability assessment free of charge?
Why is premium higher as I get older?
- Because the payout increases over time
- Premium may change depending on the amount of claims expected
- Inflation plays a role too
How much payout will I get upon claim?
Can I use someone elses Medisave to pay for CareShield Life?
If you still can’t afford premiums after subsidies, the Government will pay the outstanding amount for you.