CareShield Life: What do Singaporeans Need To Know About it? Should Older Singaporeans Switch To it?
Singapore has moved to put its house in order in an attempt to avert the effects of aging population on the healthcare sector. By 2030, it is estimated that there will be more than 1 million Singaporeans above 65 years.
Singapore government has since unveiled a new life scheme that it says is an upgrade of the current Eldershield. CareShield Life will replace Eldershield in 2020 and anyone who is above 30 years old will be compulsorily included in the scheme.
The new scheme is designed to alleviate some of the problems that could come into being because of the aging population.
What You Need To Know About CareShield Life
CareShield Life Coverage
CareShield Life is a mandatory life insurance scheme that will cover anyone born on or after 1980. The scheme is designed to ensure that everyone even those that are more vulnerable, when it comes to income, have basic protection when it comes to long-term care needs.
The Scheme will act as a replacement to the current Eldershield Life Scheme that won’t accept applications from 2021. Anyone born on or before 1979 and not covered by Eldershield will have to apply for CareShield Life coverage. The Government is to support anyone who is unable to afford premiums as a way of ensuring they don’t lose coverage. There is no maximum entry age for CareShield.
The only requirement that one needs to join the new life scheme is to turn 30 years. Apart from that, no action is required as the policy commences automatically. The government is to notify all the qualified policyholders once the commencement age is attained.
Why is CareShield Life Staring at 30?
The government has set 30 years as the minimum age that people are to be enlisted into the scheme as a way of ensuring a longer period of premium payments. A longer period allows people to spread premiums over an extended period as opposed to Eldershield that starts at 40 and ends at 65.
With CareShield Life, people will pay less annual premiums compared to Eldershield. Policy Holders will also benefit from additional years of coverage. According to the government, by age 30 most people in Singapore are usually in a position to make premiums.
Pre-existing Condition Coverage
The life scheme will cover both Singapore citizens and permanent residents. Coverage will come into effect regardless of one having a pre-existing severe disability or not. According to the government, the inclusion of those with pre-existing conditions is key to having an inclusive and caring society.
It is estimated that less than 0.1% people between the age of 30 and 40 have a pre-existing condition, thus not expected to pose any strain on the scheme or have a significant impact on premiums. All people with pre-existing conditions will enjoy coverage regardless of their ability to pay premiums.
However, those with pre-existing disabilities will be required to make one premium payment to join the scheme. The payment is less than the first payout that one would receive on a CareShield Life Payout. The government is to provide means-tested premium subsidies to people unable to make premiums even after subsidies kick in.
CareShield Life Benefits
Severely disabled policy holders stand to benefit from a minimum monthly pay out of $600. Eligible people for the payout are those that cannot do at least 3 out of the 6 tasks required for daily living. However, long-term care costs will vary depending on one’s care needs and arrangements.
People who wish to have additional coverage may have to consider supplementing their basic CareShield Life insurance, made up of supplements from private insurers. The rate of premium and payout increases is to be reviewed regularly taking into account changes in claims experience as well as longevity.
Payouts and premiums in the first five years will each increase by 2% per year. However, payouts increase will cease once policyholders stop paying premiums, e.g., when they turn 67. Those who wish to enjoy higher payouts upon turning 67 will have to purchase supplements.
CareShield Life Premium Payments
Payments are to be paid as soon as one turns 30 and end once one turn 67 years. The premium payment age will be set taking into account changes in employment age in future. The government lowered the start age to 30 and extended the end age to 67 as a way of improving the life scheme premium affordability.
Starting premiums will vary depending on age and gender. Females are to pay more than males because they tend to live for a longer time and tend to stay disabled for a longer time. Premiums will also increase to support a regular increase in payouts
For starters, a person who joins the scheme at 30 years will see his/ her premium increase from $17 a month to $36 a month, on reaching 67 years. In return, the payout will also have increased from $600 a month to $1200.
To ensure premiums are affordable even to low income earners, the government is to provide several premium support measures including mean tested subsidies of up to 30%. There is also a participating incentive of up to $2,500 that is to be used to encourage people born 1979 or earlier, to join CareShield Life.
The government has put proper premium recovery measures and penalties that are to be issued on people who are able to pay premiums but are not doing so. The scheme does not have a death benefit that means there won’t be payout, should a policyholder die.
CareShield Life Administration
The government is to administer CareShield Life Scheme and will work with other agencies of good record, to ensure it is well implemented. Some of the agencies the government will work with include Central Provident Fund as well as the Agency for Integrated Care.
CareShield Life continues to elicit mixed reaction with some praising it as other continue to raise serious concerns. For starters, some are questioning why women will have to pay more premiums than men, yet most of them tend to earn less in workplaces. Questions over the need for higher premiums continue to raise concerns given that Eldershield accumulated a totalof $3.3 billion in premium between 2002 and 2017 and only paid out $133million