Amid the global pandemic, a massive new protection pillar was added to Singaporeans’ health insurance portfolios on 1 October 2020: CareShield Life, which sits alongside MediShield Life as a complementary and compulsory disability insurance policy.
Critics have spoken out against CareShield Life as having expensive premiums, and being hard to claim from, no thanks to the criteria of being unable to perform 3 Activities of Daily Living (ADLs).
For those who wish to have additional protection can look at two types of policies: CareShield Life Supplements offered by private insurers, or standalone disability income insurance plans.
We will explain how both types of policies work and discuss keys differences to help you understand which might serve your needs better.
#1 Difference in Definitions Of Disability Between CareShield Life Supplements And Disability Income Insurance
CareShield Life Supplements payouts are tied to one’s based on the inability to perform ADLs, which is determined by one of the Ministry of Health-accredited severe disability assessors.
While the threshold for CareShield Life is the inability to perform 3 ADLs, the threshold for Careshield Life Supplements is lower. Payouts under CareShield Life Supplements can be made when the insured is unable to perform 1 or 2 ADLs.
In contrast, disability income insurance payouts are generally triggered when you are assessed to be unable to work in your original occupation or an occupation suited for your training, experience or education to earn an income.
#2 Payout Duration And Deferment For CareShield Life Supplements And Disability Income Insurance
As an enhancement to the mandatory CareShield Life, all CareShield Life Supplements provide additional monthly payouts for life, as long as you continue to be severely disabled. This is on top of any one-time benefits or ancillary limited-time payouts for rehabilitation, dependants, or caregivers.
Disability income insurance policies have a fixed term during which benefits would be paid, such as 5 or 10 years, or up to a certain age, such as 60 or 65.
Note that while CareShield Life payouts will be made as soon as the following month after the completed claim application (with accompanying assessor report) is submitted, CareShield Life Supplements typically have a deferment period before payouts will be made. Deferment periods also apply for disability income policies.
#3 Payment Modes For Premiums
Premiums for a CareShield Life Supplement plan can be paid either in cash or using funds from your MediSave account or that of your family members (spouse, parents, children, siblings, or grandchildren).
However, there is a limit of $600 that you can use for each person insured per calendar year, and any remaining CareShield Life Supplement premiums would need to be paid for in cash.
For disability income insurance, all premiums will need to be paid for in cash.
#4 Eligibility And Coverage
The final key difference between the two is in the eligibility for entry and coverage.
CareShield Life (and consequently CareShield Life Supplements) are only for Singapore Citizens and Permanent Residents (PRs) aged 30 and above. Those with pre-existing conditions will still be eligible for enrolment, and the coverage is for life.
In contrast, disability income insurance is meant to replace your monthly income when you’re unable to work, which means you need to be employed in order to enjoy the coverage and be eligible for payouts. Private insurers would also tend to either impose additional premium loading for pre-existing conditions or outright decline your application.
As disability income insurance plans are provided by private insurers, there is no limitation on nationality. Anyone who meets the insurer’s criteria can purchase them, not just Singaporeans and PRs. You also do not need to wait till you’re 30 to be covered under disability income insurance.
Depending on your needs, CareShield Life and CareShield Life supplements may be sufficient for your needs. For those with pre-existing conditions, Careshield Life and its supplements can be a blessing. However, if you are a foreigner living in Singapore or if your income replacement needs are high, disability income insurance may be worth considering.
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