Switch to CareShield Life? If premiums are affordable

While the payout for long-term disability insurance CareShield Life is better than the current ElderShield scheme, older Singaporeans say they will make the switch if premiums are affordable.

When it is made available in 2020, those aged 30 to 40 in that year will be the first to join CareShield Life, but those born before 1980 can choose to opt out when it is made available to them a year later.

Subsequent cohorts will join the scheme when they are 30.

Madam Chew Poh Geok, 62, and her husband, Mr Tan Kah Tee, 69, said if they can afford it, they will switch from their current ElderShield 300 plan.

"We haven't used much money in our Medisave for health-related matters, but we are getting older and hospital bills are getting more expensive," said the housewife.

Unlike ElderShield, CareShield Life will provide lifetime payouts, starting at $600 in 2020, but with pricier premiums.

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A 42-year-old man in 2021 who is already on ElderShield 400, will pay a $380 base premium for CareShield Life, while a woman of the same age will pay $490.

Both premiums and payouts will increase by 2 per cent each year for the first five years.

Those who are on ElderShield 300 will also have to pay an additional catch-up premium, spread over 10 years.

People who are not on ElderShield have a higher catch-up premium.

The Government will provide between $500 and $2,500 in financial incentives, over 10 years, to offset the yearly premiums to those who join CareShield Life within the first two years from 2021. Lower-income households will be eligible for premium subsidies.

Associate Professor Angelique Chan said the premiums look affordable, after factoring in subsidies.

"I would strongly recommend making the switch to CareShield Life, the main reason being the lifetime payouts," said the executive director for the Centre for Ageing Research and Education at Duke-NUS Graduate Medical School.