CareShield Life and Its Misconceptions

The launch of CareShield Life on 1 Oct led us to have many conversations with clients. In the process, we have had to explain misconceptions and misunderstandings about the scheme. Understandably so; it is a new scheme that has its roots in an existing scheme. As a result, people viewed the scheme through the lenses of the understanding of the older policy (ElderShield). Given that there are significant similarities, quite a few misconceptions were the result. We decided it is timely to delve into some of the misconceptions we have heard. While you are here, you can view this to have a better understanding of CareShield Life, and this for a better understanding of disability type insurances.

Misconception 1: “Severe disability, hard to claim”

An older client stated that severe disability is difficult to claim. Upon discussion, this stemmed from the misconception of what severe disability meant. Most people imagine severe disability to be a drastic scenario; completely and utterly immobile for example. To be clear, severe disability in CareShield Life, or its supplements, is a technical term, and it refers to the inability to perform at least 3 out of 6 Activities of Daily Living (ADL). We talk about ADLs here, but you can also see the CareShield Life site for more information.

The use of such a term allows for a common understanding and provides a standard basis of claim. This provides clarity for clients to know what they are insured for. So it is not ‘hard to claim’ but rather it is that the claim conditions are definitive. Severe disability is not limited to being bedridden, missing limbs and other extreme health conditions. As long as you require someone to assist you for 3 out of 6 ADLs, CareShield Life will pay.

A followup from some clients is that 3 ADLs sound very strict and hard to claim. Remembering that CareShield Life is meant for all Singaporeans, and affordability is key, the government tries to strike a balance between sufficient protection and costs. That said, private insurers provide cover, even in the event of just 1 ADL. So that makes claiming a little more relaxed, compared to 3 ADLs.

Misconception 2: Premiums are high.

Someone was told that that premiums for CareShield Life were $206 a month, which is quite steep. (You can check your premiums here). The author of this post, aged 39 next birthday, pays $272 a YEAR before subsidies. It is higher than ElderShield, but not in the vicinity of $206 a month. The premiums are age and gender dependent, so it is important to check your own premiums. (For older citizens, the premiums are higher, but the risk is likewise higher). The payout of $600 a month in event of severe disability is also higher than ElderShield (either $300 or $400 a month), and it increases with each year, as long as no claims were made.CareShield Life payout is also for as long as disability is present, while ElderShield lasts for 6 years at most. There are also subsidies which makes the coverage palatable.

Misconception 3: I signed up for XXX free insurance earlier this year; it is enough.

A client had remarked that he didn’t need any CareShield Life supplement because he signed up for a free cover earlier this year. Some of the insurers had provided a free sign up of their long term care insurance in preparation for the CareShield Life launch. It is important to note that the free programs, which gave a modicum of cover, was meant for the interim. In any case, the cover has ended or will be ending soon. Some clients had assumed the cover was for life (no it isn’t).

A further complication is a belief that signing up for the free cover means the automatic enrolment into the insurer’s CareShield Life Supplement. This is a misunderstanding; by signing up for the free insurance, you may be given an opportunity to enrol into the insurer’s supplement without underwriting (assuming certain conditions were met). You were not automatically enrolled into the insurer’s supplement. Misconception 4: ElderShield[1] and its supplements have ended.

This is applicable only to Singaporeans age 41 and above[2]. ElderShield and the corresponding supplements are still available. Existing policies are STILL in force, and the policy contract(s) is(are) still valid, as long as premiums are paid. These existing policies will not cease to exist. There is no fear that the premiums you used to pay have been wasted.

In fact, if you are on ElderShield, you are in a unique position. You have the option to purchase ElderShield AND/OR CareShield Life supplements[3]. Yes, unlike MediShield Life, you CAN have more than one ElderShield/CareShield Life Supplement, across the same or different insurers. This means that an ElderShield holder can also hold insurer’s A ElderShield Supplement and Insurer’s B CareShield Life Supplement, provided all the corresponding terms and conditions, such as health and the enrolment into ElderShield, are met.

For Singaporeans aged 41 and above and are not on ElderShield, you can still enrol into ElderShield and its corresponding supplements subject to health conditions. Because of this development, it is ideal to speak to an advisor who can evaluate your current coverage and structure accordingly.

It is important to note that your existing health is always the challenge in buying insurance. You buy insurance with your health. So always buy your insurances young.

[1] You can read up more on ElderShield on the webpage. To prevent confusion, we will not be delving in deep on the mechanism of ElderShield. [2] For Singaporeans 40 and below, ElderShield is no longer available; you will automatically be enrolled into CareShieldLife on 1 Oct 2020 or when you turn 30, whichever is later. [3] For Singaporeans 41 and above, more details regarding their integration to CareShieldLife will be addressed by end of 2021. There is some intention to port existing ElderShield holders into CareShieldLife but details will be out only in 2021.