Understanding severe disability coverage and why it pays to plan ahead

Since the launch of CareShield Life, severe disability coverage has been a hot topic among Singaporeans. With the right care and proper financial planning, there’re ways to overcome challenges of living with a severe disability.

Living with uncertainty is never easy but living with severe disability can be even more challenging.

Severe disability refers to the inability to perform at least three of the six activities of daily living (ADL), which are dressing, washing, toileting, walking or moving around, transferring, and feeding. Severe disability could happen to anyone at any age. It can result from a sudden event such as an accident, a heart attack, or a stroke. It could also be due to progressive worsening or complications of chronic illnesses such as diabetes, or cancer. The need for long-term care arises when one suffers from a serious and ongoing health condition as such.

What’s long-term care and how much would it cost?

Long-term care refers to providing care for someone who needs both medical care and personal care due to a severe disability. It’s often hard to predict for how long or what type of long-term care a person might need.

Most people underestimate the cost of long-term care. Among other things, you may need to hire a caregiver, pay for home modifications, medication, dietary supplements, rehabilitation, aids to help in daily living such as a wheelchair, and more. According to Aviva’s Long-term Care Study done in 2018, you may need an average of S$2,324 per month for long-term care.

How to plan for long-term care? And how does CareShield Life fit in?

Having long-term care insurance will reduce the risk of depleting your savings and make it easy for you to access the right type of care you need.

To help you prepare better for your future long-term care needs, the government launched CareShield Life—a national severe disability insurance scheme—on 1 October 2020. All Singapore citizens and permanent residents born in or after 1980—regardless of pre-existing medical conditions and disability—will be automatically enrolled into CareShield Life on 1 October 2020, or upon 30 years of age, whichever is later.

Similar to the existing ElderShield scheme, CareShield Life offers a monthly payout upon severe disability to help finance the cost of long-term care. CareShield Life, however, offers higher payouts and over a lifetime as long as the claimant remains severely disabled.

Taking inflation into account, CareShield Life payouts will start at S$600 per month in 2020 and will increase till age 67, or until you make a claim, whichever is earlier. Consequently, the premium amount will also increase over time, which is fully payable by your MediSave account.

An option to enhance your CareShield Life coverage

Given that the average cost of long-term care is S$2,324 per month, enhancing your CareShield Life coverage will allow you to access the best care you need. With a supplementary plan for your CareShield Life coverage, you can receive payouts up to S$5,000 per month with additional benefits that will help you save some out-of-pocket expenses.

Using Aviva’s supplement for CareShield Life—MyLongTermCare, which is currently offering 20% perpetual premium discount, here’s an example of how much level payout you may receive on a monthly basis and how much you can expect to be deducted from MediSave for your CareShield Life supplement annual premium:

  Female Male
Age 31 31
Product MyLongTermCare MyLongTermCare
Premium term Till age 99 Till age 99
Benefit amount S$1,500 per month S$1,900 per month
Annual premium (before 20% discount) S$723.86 S$748.14
Annual premium (after 20% discount) S$579.08 S$598.52

Did you know?

If you utilise you or your family’s member annual Additional Withdrawal Limit of S$600 from MediSave, you do not need to fork out any cash for the above premiums!

Don’t wait till it’s too late

It’s important to act now while you’re in good health as the premiums for CareShield Life supplements would vary based on your entry age and pre-existing conditions, which may limit your coverage. Therefore, the longer you wait, the more expensive your options become, and the higher your risk of becoming uninsurable.

It’s a common misconception that long-term care is for the elderly as the risk of severe disability is higher in old age. However, severe disability can be unpredictable and could happen to anyone at any age. There is always a risk that an unforeseen accident or a chronic health condition could bring about a financial disaster in a family. Planning ahead will give you and your family peace of mind and the ability to focus on what matters most. 

Enhance your coverage with Aviva today!

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