What you need to know about the new CareShield scheme
If you don’t have time to read through the whole article, you can check out our short version below.
- Two long-term national healthcare schemes will be launched in October 2020 – CareShield Life and Medisave Care.
- The benefits are designed to provide individuals with lifetime protection and assurance for basic long-term care needs, should they become severely disabled.
- You are eligible to claim if you are unable to perform at least 3 out of the 6 Activities of Daily Living (ADLs).
To boost our long-term care financing ability, the Singapore government will launch 2 new healthcare schemes in October 2020 – CareShield Life and Medisave Care. Both schemes are long-term care schemes aimed at providing protection and basic financial support for Singaporeans who become severely disabled, especially during their elderly years.
What is CareShield Life?
CareShield Life provides long-term care coverage for all Singapore residents born in and after 1980, including those with pre-existing disabilities. The benefits are designed to provide individuals with lifetime protection and assurance for basic long-term care needs, should they become severely disabled.
These benefits include:
- Lifetime cash payouts for as long as the individual remains severely disabled.
- Payouts that start at $600 per month in 2020 which will increase annually until age 67 or when a successful claim is made. From 2020 to 2025, payouts will increase at 2% per year.
- Lifetime coverage once you have completed paying all your premiums, which will happen in the year you turn age 67 or 10 years after you join the scheme.
You are eligible to claim if you are assessed by a MOH-accredited severe disability assessor to be unable to perform at least 3 out of the 6 Activities of Daily Living (ADLs).
Who are covered under CareShield Life?
Singapore residents aged 30 to 40 in 2020, will be the first cohort to join the scheme starting 1st Oct 2020 or their 30th birthday, whichever is later. Those born after 1990 will automatically join the scheme when they turn 30.
Participation in CareShield for Singaporeans born in 1979 or earlier is optional.
Those who are enrolled between 2020 and 2024 will receive up to S$250 in transitional subsidies.
In the meantime, you can check the estimated CareShield Life premiums here.
Why do we need CareShield Life?
With Singaporeans’ life expectancy around 85 years old, 1 in 2 healthy Singaporeans aged 65 could become severely disabled in their lifetime. Severe disability may occur due to several reasons, including a sudden disabling event such as a stroke, the deterioration of chronic illnesses and conditions or the progression of debilitating illnesses as we age (e.g. dementia). The implication is that one would require long-term care and the financial support for it.
Insurance schemes like CareShield Life help to pool risks together to ensure protection against potentially catastrophic long-term care costs for Singapore residents.
Another key advantage of the scheme is that it covers pre-existing disabilities, which many private insurers may not cover.
How does CareShield Life work?
Beatrice is 35 years old and has been paying for her CareShield Life premiums for the last 5 years. She met with a car accident that caused her to be severely disabled. She will be able to make a claim to CareShield Life and receive $662.45* per month.
*Based on yearly increase of 2%.
How does CareShield Life compare with ElderShield?
ElderShield will be replaced by CareShield Life in 2020. However, for those who have already been enrolled in ElderShield, you can choose to continue with ElderShield plan or change it to CareShield Life.
To decide if you should stay on ElderShield or CareShield life, read about their differences here.
Do you still need disability insurance if you are covered under CareShield Life?
Disability income insurance is an important type of protection, especially if you have dependants or is the sole breadwinner of the family. Disability insurance provided by private insurers generally covers total and permanent disability and insure against loss of income when an individual becomes disabled and is unable to work. As such, private insurance plans typically cease coverage between ages 60 and 70 when the assured retires.
On the other hand, CareShield Life provides lifetime coverage, even when the insured has stopped paying premiums or if they become severely disabled in their later years.
What is MediSave Care?
MediSave Care is a scheme that enables Singapore Citizens and Permanent Residents aged 30 and above who are severely disabled to be able to make monthly cash withdrawals of up to $200 per month from their own and/or their spouse’s MediSave account for their long-term care needs.
Hello, we’re NAV.
Inspired by the word “navigate”, NAV is an initiative by DBS & POSB created to help you navigate your finances, your way. Whatever your financial goals are in life, no matter what situation you are in, we’re here to help you on your financial journey.
Ready to start?
Speak to the Wealth Planning Manager today for a financial health check and how you can better plan your finances.
Alternatively, check out NAV Planner to analyse your real-time financial health. The best part is, it’s fuss-free – we automatically work out your money flows and provide money tips.