CARESHIELD LIFE VS ELDERSHIELD: WHICH ONE IS BETTER?

Understanding The Differences Between These Two Policies

This year, a new disability insurance scheme, CareShield Life, was launched. For Singaporeans aged 40 and below, you will be automatically enrolled into CareShield Life in on 1st October 2020.

However, in this blog, I want to address those above 40s. You have a choice if you want to stay enrolled to ElderShield, manually opt in, or opt out totally. So let’s compare and understand what the significant differences between the two schemes are.

Both CareShield Life & ElderShield are disability insurance schemes

Both CareShield Life and ElderShield Life, which are fully payable by Medisave, are disability insurance schemes aimed to provide payouts if or when you become severely disabled.

They both use the government’s definition of severe disability. Essentially, it’s the inability to do at least 3 out of 6 Activities of Daily Living (ADLs).

These ADLs are:

• washing

• dressing

• feeding

• using the toilet

• walking or moving around, and

• transferring

IMPORTANT: Just knowing that you qualify isn’t enough. You need to be certified by a MOH-accredited severe disability assessor to be able to claim for payouts.

Let’s analyse the difference between the two:

In a nutshell, the new CareShield Life scheme requires younger Singaporeans (age 40 and under in 2020) to contribute incremental premiums over a longer premium term. This is compulsory.

This is so that Singaporeans who become severely disabled get lifetime monthly payouts that increase over time.

The earlier ElderShield scheme only pays out for 5 to 6 years, which may not be enough in view of the fact that Singaporean’s average lifespan has increased to 84.8 years.

Under CareShield Life, the monthly cash benefit is also higher, starting at $600 per month in 2020. Plus, it covers pre-existing conditions for those born in 1980 or earlier.

If you are older than 40 in 2020, you have the option of staying enrolled in CareShield Life, opt out of it, or opt in by choice. What do you need to do following the introduction of CareShield Life?

If you’re born in 1979 or earlier, after reading this article, you need to make a decision as to whether you wish to enroll into CareShield Life.

• Born earlier than 1970: You can opt to join CareShield Life from mid-2021 if you’re not currently severely disabled.

• Born between 1970 and 1979: If you are currently covered under the ElderShield 400 and are currently not severely disabled, you will be enrolled automatically. You have a choice to opt out anytime from the launch of CareShield Life to 31 Dec 2023. Your premiums will be refunded.

• Born between 1980 and 1990 (30 to 40 years old in 2020): You’re automatically covered under CareShield Life. If you are any younger, you will be enrolled when you turn 30. This is compulsory.

Other Things You Need to Know About Careshield Life & Eldershield

First, the transition from ElderShield to CareShield Life for Singaporean residents will take time. Younger Singaporeans born in 1980 and later will be automatically enrolled with no exceptions starting mid-2020, or when they turn 30. If you were born in 1979 or earlier, you have the option to enroll in mid-2021.

If you’re already covered under the existing ElderShield and ElderShield supplements, they continue to stay in force, with the same premiums and benefits. The administration of the schemes will be taken over by the government from insurers in mid-2021. Only the supplements will stay with private insurers.

Side note: There is no information on CareShield Life supplements at the moment.

By mid-2021, ElderShield will likely not accept new applications.

What if you are already above 40 in 2020?

Here are 3 possible scenarios to consider:

1. You were automatically enrolled and are still covered by the basic ElderShield. Should you opt in to CareShield Life?

If you become severely disabled, under ElderShield you get $300 to $400 per month for 5 to 6 years. For this coverage, you pay $174.96 (men) or $217.76 (women) in yearly premiums.

You have 3 options. Switch to CareShield Life, remain on ElderShield 400 or upgrade your ElderShield plan to get higher payouts.

Under CareShield Life, premiums based on a man aged 41, earning $2,801 amount to $268 after subsidies and participation incentives. This amount increases over time, and the premium term is until you turn 67 years old. That’s potentially 26 years if you’re 41.

In return for higher premiums, you get higher monthly payouts ($600 starting from 2020) that increases over time, and for life.

Research shows that 3 in 10 remain in severe disability for 10 years or more, so CareShield Life provides better peace of mind, but it comes with higher premiums. So it’s all about how much risk you are comfortable with, and your budget.

2. You are covered by ElderShield and an ElderShield supplement. Is it still worth it to opt in to CareShield Life?

An ElderShield supplement ensures that you receive a higher monthly payout over a longer period than the basic ElderShield. You could use up to $600 a year from MediSave to pay for the premiums for the supplement. If you want higher monthly benefits, you could top up cash as well.

Depending on your plan, you may find that switching to CareShield Life may not be a better choice, since you could potentially receive similar monthly benefits (starts at $600 in 2020) at leveled and fixed premiums.

CareShield Life’s premiums increase over time and the premium term might be longer, until age 67.

Ultimately, you have to do your own comparison based on your existing supplement to see if you should remain on ElderShield and ElderShield supplement or switch to CareShield Life.

3. You don’t have ElderShield.

You may have opted out, got rejected, or were older than 40 in 2002. Whatever it was, you currently don’t have ElderShield. You can consider CareShield Life premiums and premium terms to decide if you should join it or not.

CareShield Life Supplement

Of course, comparing ElderShield supplement with CareShield Life basic scheme isn’t really fair. We need to see what CareShield Life Supplements can provide. Currently, there isn’t much information available.

Feel free to contact me to get updates on the latest CareShield Life Supplements.

Frequently Asked Questions

1. How to know if I’m on Eldershield 300 or 400?

If you enrolled before 30 September 2007, you’re on ElderShield $300. You get $300 a month over 5 years if you become severely disabled. If you enrolled on 30 September 2007 or later, you’re on ElderShield 400. This means you get $400 a month over 6 years if you become severely disabled.

2. Is CareShield Life compulsory?

It is only compulsory if you are born in 1980 or later, meaning you are 40 or younger in 2020.

Questions about CareShield Life?

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