Seth’s Blog on Finance

What is ElderShield?

ElderShield is a Long-Term Care insurance scheme that Singaporeans are enrolled in on an opt-out basis when they reach the age of 40 years old. It is designed to provide a monthly payout to the insured upon severe disability typically associated with old age (hence the name).

Similar to MediShield, the premiums are payable by a CPF Member’s Medisave account, and there are optional supplements to be purchased with private insurers (as of writing, three insurers offer such supplements).

What constitutes “severe disability”? It is the inability to perform at least 3 of the following defined Activities of Daily Living (ADLs):

• Washing
• Dressing
• Feeding
• Toileting
• Mobility
• Transferring

The payout is meant for the insured to cope with a higher cost of living due to impairment, such as nursing home fees or expenses for domestic help.

Types of schemes

There are currently two ElderShield schemes – ElderShield300 and ElderShield400. As the name suggests, ElderShield300 provides a payout of $300 per month for a maximum of 60 months. ElderShield400 provides a monthly payout of $400 for a longer duration of up to 72 months. ElderShield supplements allow one to increase his or her payout amount as well as the duration of payout, up to a lifetime if desired. The amount payable by one’s Medisave for such a policy is capped at $600 per year per person insured. There are quite a few configurations of such supplements available so one should speak with a financial adviser for advice.

Who should take up such a policy?

People 40 and above may want to seriously consider taking up a supplement plan to alleviate the burden one can cause to family members in such a situation. People with parents should insure them to avoid potential financial impact. Having a monthly payout in the unfortunate situation also provides one with better options to be filial rather than to send one’s aged parents to JB.

There are murmurings on the grapevine that the government is considering lowering the entry age to 35. Accordingly, I suggest a rename of the scheme. The current name invokes a rather negative stigma with age-sensitive people, and perhaps also a little misleading. Are young people immune to becoming severely disabled? Hmmm…