Karen Tang, CFP®: Certified Financial Planner in Singapore

In Two Minds About Enhancing Your Long Term Care Protection? Here are 5 Facts That You Can't Ignore!

financial planner singapore, CFP singapore, long term disability

ElderShield is a severe disability insurance plan which provides basic financial protection for long-term care. It pays out $300/month or $400/month, for up to 5 and 6 years respectively, if you’re disabled i.e. defined as inability to do 3 out of 6 specific activities of daily living independently. This cash payout is meant to help you offset the cost of care needed and ongoing living expenses.

The question is: Is $300 or $ 400 per month going to be sufficient? The answer is an obvious ‘No’!

So, what is stopping you from getting a supplement to enhance the ElderShield monthly payout benefit? The facts here are taken from actual statistics.

Myth #1: It is relevant for old folks who are 60 years and above.
Fact #1: The bulk of claimants are in their early forties. (Source: Aviva 2016 claims statistics)

Myth #2: Chances of me losing my physical/ functional independence is low.
Fact #2: The chances that anyone cannot perform 3 out of 6 Activities of Daily Living (ADLs) is highly possible! According to Aviva’s 2016 claim statistics, men made up 56% of claims while women made up 44%.

Myth #3: It will not happen to me.
Fact #3: Life is unpredictable! The prudent thing to do is to get ourselves financially prepared for the unexpected.

The top 2 causes for severe disability claims:

  • 32% Stroke
  • 12% Cancer

Do you know?

  • 50% of Aviva’s stroke claimants are women.
  • 80% of Aviva’s heart attack claims come from men.
    (Based on Aviva CI claims statistics 2015 to 2017)

Myth #4: The Basic Eldershield payout ($300/ $400 per month) is enough.
Fact #4: Be realistic about the rising costs of nursing and medical care in Singapore! Hiring a maid, on average, will cost around $700 a month. What about other expenses like medical bills, transport, mobility aids or modifications to home, physical or psychological therapy, alternative medicine like TCM? On average, long term care costs $2,150 per month. (Source: Aviva Long Term Care Study 2011)

Myth #5: The disability will be short term.
Fact #5: 37% of caregivers have been providing care for their recipients for over a decade. On average, they provided 6.8 hours of care per day. (Source: Statistics Singapore Newsletter, September 2011, Caregiving in Singapore) Imagine what they go through day in and day out …

Food for Thought:
Do not opt out of Eldershield because you have been automatically enrolled into the scheme without any health exclusion!

Do not wait till you are much older to enhance your Eldershield, thinking you can save some money on premiums. It will be too late when a disability strikes. Your health may change and pre-existing conditions will either be excluded, accepted with special terms, accepted with premium loading or your application can be declined altogether.

Premiums are higher when you enrol at a later age. When you enrol at age 40, you basically ‘lock-in’ the premiums at that point in time. Premiums remain the same throughout the cover period but are not guaranteed.

Depending on your affordability, get the most optimal level of monthly benefit, bearing in mind the potential costs involved when one is no longer independent.

This is your permanent life long disability coverage! Most insurance plans terminate their disability protection at age 60, 65 or 70 and their definitions of Total and Permanent Disability also make a huge difference to claims eligibility.