Turning 40 is a pretty big deal. For most people, it means they are halfway through their lives. If you not an army officer, turning 40 means you automatically ROD, even if you have not completed all your In-Camp Training (ICT).
When even the army recognises that you are no longer young, you know there is no denying the truth.
As a further recognition that you are no longer young, the government will send you a birthday an ElderShield notification letter. This letter is meant to inform you that you are automatically enrolled for ElderShield at age 40.
What is ElderShield?
ElderShield is a national insurance scheme that aims to provide basic insurance coverage to Singaporeans who are in need of long-term care support during their old age.
Unlike Medishield Life, which is compulsory for all, ElderShield is an opt-out scheme. That means all Singaporeans and Permanent Residents (PRs) can choose to opt-out of the insurance scheme if they wish to.
What Does ElderShield Covers?
Under ElderShield 400, policyholders will receive a payout of $400 per month for a maximum of 72 months (6 years) if they are assessed to have “severe disability”.
The criteria for severe disability are when a person cannot perform three out of six Activities of Daily Living (ADLs).
Source: Ministry Of Health
Supplement Plans For Higher Payout
The general feeling from people that we talk to is that payout of $400 per month is insufficient on its own to meet the additional cost that comes with long-term assisted living. We think their concern is certainly valid.
As such, all three insurers for ElderShield, Aviva, Great Eastern & NTUC Income, have ElderShield supplement plans that allow policyholders to enjoy higher payout, and for payout to be extended beyond 72 months.
For example, Aviva allows policyholders to choose their preferred monthly payout from a minimum of $600 up to a maximum of $5,000. This allows policyholders to customise their disability payout to a level that they are comfortable with.
How Much Do I Pay For ElderShield Coverage
Coverage is relatively inexpensive. Premiums are charged on an annual basis from age 40 till 65. Premiums will cease after the age of 65 while coverage would continue for life.
Premiums are as follow.
|Annual Premium||Number Of Years||Total Premiums|
For those who opt for ElderShield supplement plans, premiums would naturally be higher, depending on the extent of coverage.
Important Note: A common misconception is that coverage for ElderShield would lapse after the age of 65 when premiums payable cease. This is not true. Coverage would continue for the lifetime of the policyholder.
Should I Opt Out For ElderShield?
We think ElderShield coverage is relatively inexpensive, especially since we can use our Medisave to pay for the premiums. For those who opt for ElderShield supplement plans, up to $600 annually can be used from your Medisave to pay for the premiums.
According to the Ministry Of Health, about 1 in 2 Singaporeans who are healthy at the age of 65 is at risk of having a long-term disability over their lifetime. While that does not necessarily translate into payout from ElderShield, it’s nevertheless a reminder that old age would bring with it its own health related challenges.
Unless you have specific reasons, we would advise for most Singaporeans to not opt-out of ElderShield and to simply continue being enrolled for it.