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Everything About CareShield Life, The Insurance That’s Compulsory For S’poreans Aged 30 to 40

2020-08-28 , 5:18 pm

Are you going to be 40 years old and below this 1 Oct 2020?

Because if you are, I’ve got some news for you: You’ll have to buy the CareShield Life insurance.

On 28 Aug 2020, it was reported that on 1 Oct, Singaporeans who are aged 30 to 40 years old will be the first batch of people to join the compulsory CareShield Life Scheme.

They will receive their CareShield Life welcome package and subsequently, more Singaporeans will join them the moment they hit their 30th birthday.

That’s right, you have no choice.

So what is it? And why is the government making it compulsory?

CareShield Life

According to the Ministry of Health (MOH) website, CareShield Life gives you a certain amount of money every month if you become “severely disabled requiring long-term medical care”.

In simple terms, it works like insurance lah; if something serious happened to you, you’ll start getting a certain amount of money every month (at least $600, according to ST) until you die.

But if nothing happens to you, then you don’t get any money at all.

Severely disabled is described as a person needing help in at least 3 areas of daily living:

eating
getting dressed
using the toilet
bathing
moving or walking around
getting from the bed to a chair or vice versa

Compulsory For People Between 30 To 40 Years Old

This insurance will be compulsory for everyone born after 1980 and before 1990, basically, those who are between 30 to 40 years old this year.

You’ll have to pay premiums until you’re 67 years old but in exchange, you’ll be given lifetime coverage, even after you stopped paying premiums.

You can think of it like another CPF, except for this one, you hope you don’t get the money back.

This will kick into effect on 1 Oct 2020.

Premiums

Now, I know what you’re thinking: Wait, are we being forced to buy insurance? Could what Dear Alyne said be true?!

Well, you’ll be glad to know that the premiums for the insurance can be paid with your Medisave account.

How Much Is It?

For 2020, the premium for the CareShield Life is $206 a year (men) and $253 a year (women).

The premium will increase by 2% each year for the first 5 years, after which you’ll have a council deciding on the amount, just like how our fares are determined by a group of people too.

Payouts will start at $600 per month, and similar to the premium, increase by 2% each year as well.

Here’s How The Payment Scheme Works:

According to ST, only Singaporeans aged 30 and above will have to start paying their annual premiums from 1 Oct 2020 until they’re 67 years old.

For those who have yet to reach the big 3-0, you don’t have to pay anything until you reach your 30th birthday.

For every individual, it’s mentioned that you only need to pay the premium 38 times (until you’re 67 years old).

The money will come from your Medisave account so you don’t have to fork out any physical money.

But.

If your Medisave account doesn’t have enough money, you can either use your spouse’s Medisave account or another family member’s.

And if nobody you know has enough money in your Medisave account? You’ll have to use cash to top it up.

Subsidies

Of course, not everyone can afford the charges, especially now when people are losing their jobs left, right and centre.

Lower to middle-income residents will get up to 30% subsidy for their premiums.

You can see the table below for the rates:

For people who still can’t afford the premiums after the subsidies, you can approach the government for help.

You Stop Paying The Moment You’re Severely Disabled

So let’s say you had an accident and you’re considered severely disabled.

Do you still need to continue paying the premiums? Since, you know, it’s probably harder (at least at first) to get a job while you’re recovering and build up your Medisave.

The answer is “no”.

Anyone who is under the CareShield Life will stop paying premiums the moment they are disabled to the point that they are eligible for the payout.

So if you’re 55 years old and something happens, you can stop paying immediately but still benefit from the plan.

The Catch

Your payout will be frozen at the year which you start receiving the benefit.

Say in 2 year’s time, you suffer an accident and you get a payout of $624.24.

From that moment on, your payout will be stuck at $624.24, even if you’ve received the payout for 10 years and inflation has made your $624.24 worth $300.

Similarly, when you reach the age of 67 years old and made your last premium payment, your payout will be frozen at the level of your last payment.

So if you’re paying $404.24 and can get a payout of $800, you’ll only be eligible for that amount for the rest of your life, nothing more.

If you no longer meet the criteria for severe disability, you will not be eligible for the payouts anymore.

According to MOH’s estimation, the median duration for Singaporeans to remain in severe disability is 4 years.

For older Singaporeans, details to join this scheme, which is said to be optional for them, will be released later.

You can find out more details here.