5 Reasons to Upgrade Your CareShield Life

As someone fast approaching 35 years of age, I have come to realise that today’s thirty-somethings are a really interesting bunch. Sandwiched between Generation X and zoomers, we’re old enough to know what life was like before the internet, but young enough to have grown up being constantly connected. We still have Facebook accounts, and perhaps only started using TikTok this year. We’re also reading blogs like this now, responsibly “adulting”… even if that’s apparently a rather cringe- inducing term now.

We also find ourselves now being covered by this thing called “CareShield Life”, and if you don’t feel old enough by now, you should also know that before CareShield Life was introduced, there was… ElderShield.

Some questions that may run through your mind right now include: “what exactly is CareShield Life?”, “what should I do about it?”, and something random like “why do I keep getting backaches?” 

Firstly, CareShield Life is a compulsory government insurance scheme for everyone born in 1980 or later, and it pays out a monthly benefit in the event we become severely disabled i.e. unable to perform at least three of the six Activities of Daily Living (washing, dressing, feeding, toileting, transferring and walking or moving around). The payout would be very useful to cover long-term care expenses.

Secondly, we can use our MediSave savings to upgrade our coverage with one of three private insurers. This can be as simple as completing an online application form.

Finally, I still don’t know why my back keeps acting up even with a pricier new mattress, but here are 5 reasons why you should upgrade your CareShield Life:

Reason 1: disabilities can happen at any age and can be costly

As we age, the chances of becoming disabled increase. 1 in 2 Singaporeans aged 65 could require long-term care for severe disabilities, and as many as 3 in 10 could be severely disabled for at least 10 years or more¹.

That said, severe disability is unpredictable, and thirty-somethings aren’t immune to it. Serious accidents and medical conditions like stroke, which are known to happen at any age, can lead to severe disability. People in our age group tend to have greater liabilities too, often juggling between expenses like our mortgage, childcare fees, and taking care of our retired/retiring parents. Having enhanced coverage for long-term disabilities can provide peace of mind even before a disability strikes, and alleviate financial stresses should the unfortunate happen.

The cost of disability is also tremendous, and according to Singlife’s 2018 Long-term Care Study, the average monthly cost for long-term care amounts to S$2,324 for things like living expenses, caregiver costs, medication, therapy and other expenditure. Such costs are exacerbated by general and healthcare inflation, as well as if the person’s condition worsens over time.

Mandatory CareShield Life provides S$624 per month (for successful claims made in 2022), and while that helps defray some of the costs, it may not be sufficient to hedge against the risk of long-term disability. With a supplement, you can get additional payouts of S$200 to S$5,000 on top of the basic payouts of your CareShield Life plan, and that would go a long way towards relieving the financial costs brought about by disabilities. Some supplement plans even offer additional benefits such as additional payouts if you have young children to help with caregiver costs, or a sum for your loved ones should you unfortunately pass on while receiving the monthly severe disability benefit.

Reason 2: cost of coverage goes up with age

You might be thinking that you’re not that old to be severely disabled, and that’s not wrong. So why on earth are we somehow covered under what used to be called ElderShield?!

The reason why we are able to upgrade our CareShield Life from 30 years old is not so much to cover for income loss in the event of severe disability during our working years (that’s the job of disability income insurance). Rather, it’s because insurance premiums increase with your entry age. So, purchasing a CareShield Life supplement in your 30s means premiums will be cheaper compared to what you’d pay for a later purchase.

For a policy covering $1,000 of monthly benefit, a 30-year-old female pays $570.95 per year, and since this amount is under the MediSave limit of $600 a year for such a policy, she can opt to make full payment via MediSave. In comparison, if she waited until 40, she would have to pay $937.32 for the same amount of coverage.

Monthly benefit (for lifetime)	$1,000	$1,000
Age (Female Non-smoker)	30 years old	40 years old
Annual Premium (after 20% perpetual discount from Singlife applied)	$570.95	$937.32
Yearly out-of-pocket expenses (Premiums exceeding the S$600 Medisave deduction limit will have to be paid in cash)	$0	$337.32
Total premiums paid (Premium term up to age 67)	$21,125.15	$25,307.64

Reason 3: coverage is harder to obtain as our health declines

Avoiding higher premiums isn’t the biggest reason for upgrading your CareShield Life sooner rather than later. The risk of losing our insurability is something that is often overlooked when we talk about insurance, but it is a very relevant thing particularly in our thirties. Despite what the TikTok generation says, we’re not old… but we know we’re not getting any younger.

Health can decline – fast – and as someone who has worked with insurers for years, I know that even what seems like a small health issue can greatly complicate insurance applications. This is also why some may say that insurance is bought with health rather than wealth. Cliché, I know, but you’d know how true it is if you ever handled underwriting for people whose health is less than perfect.

Upgrading early allows you to lock in not only the premium rate, but also a favourable underwriting result when it comes to insurance coverage like this.

Reason 4: our government allows you to use your Medisave to pay for such a coverage

Our government is known for being prudent with the use of CPF monies, and the MediSave Account is perhaps the most well-guarded among our CPF accounts. You can only use it for a few things², the first of which is paying for healthcare costs, and even that is subject to various limits. The second is to pay for insurance premiums, and it’s only for MediShield Life, CareShield Life, and their respective upgrades with private insurers. To me, the fact that we’re allowed to use our MediSave funds for coverage enhancements highlights the importance of such insurance.

Using your MediSave money to purchase coverage to protect your cash funds in the event of a severe disability is financially prudent. If the unfortunate were to happen, the maximum you can withdraw from your Medisave to pay for long-term disability is… $200 per month. That seems inadequate given how much long-term care can cost, and upgrading your CareShield Life coverage using your MediSave before disability happens seems like a better plan.

Reason 5: Singlife is offering 20% perpetual discount* and other features!

The last but certainly not least of reasons to upgrade your CareShield Life sooner rather than later is because Singlife is currently offering a 20% perpetual discount on its CareShield Life supplements. “Perpetual” means it’s not just for your first or second-year premium; it means you’ll enjoy the 20% discount for as long as your policy remains in force!

On top of that, one of the plan’s features that Singlife offers is the additional payouts for those with children under 22 years of age when you are severely disabled. Even if you don’t have kids yet, you may one day become a parent and have greater financial responsibilities. That’s why the plan also gives you the option to increase your coverage without the need for assessing your health when you become a parent, allowing you a boost in protection when you need it more.

Conclusion

Part of responsible… adulting includes making sure your bases are covered, and severe disabilities are part of those bases. Since your 30s tends to see the start of backaches, joint problems and other health issues that could lead to severe disability, it’s probably a good idea to ensure you’re adequately protected sooner rather than later. Find out more by tapping here. 

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1. Ministry of Health, Why do you need to plan for your future long-term care needs?
2. CPF Board, 10 uses of MediSave

*Terms & conditions apply

This policy is underwritten by Singapore Life Ltd.

This article is published for general information only and does not have regard to the specific investment objectives, financial situation and particular needs of any specific person

Please refer here for more information on Singlife CareShield Standard or Singlife CareShield Plus.

Protected up to specified limits by SDIC. This advertisement has not been reviewed by the Monetary Authority of Singapore. The information is accurate as at 10th January 2023.

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