Karen Tang, CFP®: Certified Financial Planner in Singapore

What Is Eldershield Insurance All About?

Eldershield supplement

I’ve been asked a lot what the national ElderShield scheme is about. Eldershield was first launched by the MInistry of Health (MOH) in September 2002. The fact that the government made it an ‘opt-out’ (i.e. automatically enrolled) scheme means that it is important enough for Singaporeans and Singapore PRs to be covered under ElderShield.

Benefits and features of Eldershield:
  • ElderShield is a basic long term care insurance plan. This scheme helps individuals cope with the financial demands of a severe disability. Singaporeans and PRs aged 40 with Medisave accounts will be automatically included in the scheme unless they opt out of it. No medical assessment is required and an insurer will be randomly assigned to you. Currently, MOH has appointed 3 insures to manage Eldershield. They are: Aviva, Great Eastern and NTUC Income.
  • It pays out a monthly benefit of $300 (Eldershield 300) or $400 (Eldershield 400) for 60 months and 72 months respectively.
    For those who turned 40 in September 2007 (Eldershield reform) and after, the monthly payout is $400. The coverage is basic, nothing to shout about because it is designed to keep premium affordable for all Singaporeans and PRs.
  • Criteria for claim: What is the definition of disability?
    It is the inability to perform 3 out of 6 Activities of Daily Living (ADL) or what we call basic personal tasks. Disability can be due to an illness or an accident.
    • Washing – The ability to wash in the bath or shower (including getting into and out of the bath or shower) or wash by other means.
    • Dressing – The ability to put on, take off, secure and unfasten all garments and, as appropriate, any braces, artificial limbs or other surgical or medical appliances.
    • Feeding – The ability to feed oneself food after it has been prepared and made available.
    • Toileting – The ability to use the lavatory or manage bowel and bladder function through the use of protective undergarments or surgical appliances if appropriate.
    • Mobility – The ability to move indoors from room to room on level surfaces.
    • Transferring – The ability to move from a bed to an upright chair or wheelchair, and vice versa.
  • Eldershield premium is based on your age when you join the scheme.
    The good news is that premium stays level throughout and does not increase with age.
  • Premiums are paid using Medisave.
    If you do not have sufficient Medisave savings, you can use the Medisave funds of your spouse, parents, children and grandchildren.
    • Lifetime cover
    • Guaranteed renewable
    • Worldwide coverage
    • Tax-free cash payout (use it anyway you like)
    • 90-day deferment period
    • Waiver of premiums upon successful claim

So, should you stay with Eldershield or opt out of it? By opting out, you would be forgoing 2 things:

  1. Insurability – Since this is an ‘auto inclusion’ scheme, you do not need to go for any medical assessment. In other words, regardless of your current health status, you are covered by Eldershield without any exclusions. On the contrary, if you develop a health condition in the future and wish to be enrolled into the scheme then, the insurer will request for a full medical declaration and it is likely that exclusions will apply.
  2. Affordable premium – You benefit from a more affordable premium when you get onto the scheme earlier than later. For instance, annual premium for a 40 year old male is $174.96 whereas for a 55 year old, it is $425.19.

Then the other question that might have crossed your mind is this:

Is the monthly benefit of $300 or $400 sufficient to take care of medical care and related expenses when one is suffering from a severe disability for an indefinite period?

You and I know that the answer is a big ‘No’.

Given the rising costs of medical care in Singapore, the need to enhance your Long Term Care becomes even more urgent. Come talk to me and get yourself protected today!