CareShield Life is our national long-term care insurance scheme. It provides lifelong protection to Singaporeans who are severely disabled, ensuring that long-term care remains accessible and affordable. Launched in 2020, CareShield Life effectively replaced the previous ElderShield scheme.
5 years later, the CareShield Life Council was convened to review the scheme. Their three recommendations, which were accepted by the government in full, included:
- Doubling CareShield Life payout growth from 2% per annum to 4% per annum
- Maintaining the eligibility criteria for accessing CareShield Life payouts
- Adjusting the CareShield Life premiums to sustain the higher payouts, with additional support provided to keep premiums affordable
The third recommendation naturally received the biggest reaction, as the Council’s report revealed that, on average, policyholders will see a 35%, or $126 increase in gross premiums in 2026, followed by an annual increase at 4% thereafter.
In their report, the Council provided several reasons for this premium increase, which can be distilled into three main points.
Read Also: Complete Guide To Understanding CareShield Life
#1 Risk-Pooling Through Pre-Funded Insurance
The United Nations defines a country as “super-aged” once the population of citizens aged 65 and older exceeds 20%. As Prime Minister Lawrence Wong reminded us at his National Day Rally 2025, Singapore will likely cross that mark by 2026. He also mentioned that by 2035, this figure is expected to rise past 25%. That means about one in four Singaporeans will be aged 65 and older.
Read Also: National Day Rally 2025: 6 Ways That Shape The Future Of Singapore Beyond SG60
One of the key features of a long-term care insurance scheme is that of risk-pooling. In the context of CareShield Life, risk-pooling means spreading the risk of severe disability across a large group of people who pay premiums. Having a large group of CareShield Life policyholders allows payouts to be higher while ensuring that premiums are still kept relatively low. This is why all Singaporeans are automatically enrolled in CareShield Life once they reach 30 years old.
Long term care costs can add up over time, and it is difficult to anticipate when and how much care is required. Since long-term care needs are unpredictable, CareShield Life premiums are pre-funded.
This means they are set aside during our working years for future claims that are more likely to happen in our old age. Furthermore, our premiums are designed for each generation to support our own needs. We are not just paying for our current generation’s needs, but our future expected claims as well.
#2 Payouts Need To Increase Amid Rising Long-Term Care Costs
Long-term care costs are rising globally. According to the CareShield Life Council Report, in Singapore, they have been increasing at a rate that “has outpaced general inflation”. This means that our existing CareShield Life payout growth rate of 2%, meant to match inflation, is no longer sufficient.
According to the Report, estimated monthly costs for an individual with severe disability in 2026 ranges from $2,700 for those receiving community care, to $4,900 for a Category IV nursing home resident, i.e. with the highest care needs. In 2018, just 6 years ago, nursing home fees were approximately $2,400 per month.
Other contributors to rising long-term care costs include better but costlier technology, and global competition for healthcare workers, which leads to rising healthcare manpower costs.
If CareShield Life payouts are to continue to provide basic protection amid rising long-term care costs, the payout growth rate needs to be higher. Of course, this means that the premiums must also be increased accordingly.
Source: CareShield Life 2025 Review
#3 CareShield Life Is Based On Collective Responsibility
The purpose of CareShield Life is to provide universal coverage for all Singaporeans, especially those born since 1980 and are automatically enrolled in CareShield Life. Universal coverage means long-term care payouts are provided regardless of pre-existing medical conditions or disabilities.
This type of inclusivity represents a collective responsibility – that we, as a generation, are looking for one another. This is how CareShield Life premiums are priced as well, by ensuring that premiums collected from us as a generation can support all claims that we are expected to make over our lifetimes.
Over the years, a growing number of CareShield Life claims have been made. In 2024, a total of 1,821 people made CareShield Life claims. The median age of these is 52 years old. This implies that about half of CareShield Life claimants are in their 30s and 40s.
Source: CareShield Life 2025 Review
Collective responsibility also includes the government, which will provide transitional support of $440 million to ensure that the CareShield Life premium increases are evenly phased in over the next 5 years. The younger the policyholder, the higher the transitional support.
For example, a policyholder born in 1990, living in a 3-room HDB flat and has a per capita household income of more than $3,600 per month will enjoy a total transitional support of $251. This will ensure that the increase in CareShield Life annual base premiums in 2026 do not come as a shock.
Source: CareShield Life 2025 Review
