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ElderShield 101: What it is and why you need it

1. What exactly is ElderShield?

ElderShield is, in a nutshell, a severe disability scheme by the Singapore government that provides basic financial protection for those who require long-term care. 

Under the ElderShield400 scheme introduced in 2007, Singaporeans and Permanent Residents will receive a monthly cash payout of $400 for a maximum of 72 months, or six years. 

Those who joined the scheme from September 2002 to August 2007 will be on the ElderShield300 scheme. This scheme has a monthly payout of $300 in cash for up to 60 months, or five years.  You can use this amount for any form of expenses.

2. Why do I need it?

As you grow older, your health may begin to deteriorate with age. According to the Ministry of Health (MOH), 1 in 2 Singaporeans above the age of 65 could become severely disabled in their lifetime. 

“Severe disability” refers to individuals unable to perform three or more daily activities independently. 

Those in this category require assistance from a caregiver to perform these activities.

As you get older and enter retirement, it becomes of great importance that you don’t become affected by rising medical costs.

There are a growing number of elderly patients at home, incurring medical costs such as home care, domestic helpers, home modification as well as medical support devices.

“Without a substantial safety buffer in your retirement income, it might be wise to utilise the eldershield program and even enhance it for better coverage using your medisave,” said Rayner Goh, Financial Services Consultant, Manulife FA.

3. How to check if I am covered?

If you are a CPF member with a MediSave account, you will be automatically enrolled into this scheme once you reach the age of 40

Three months before this happens, you will receive an ElderShield welcome package from one of three private insurers officially appointed by the MOH: Aviva, Great Eastern or Income

Note that you will still be able to change your insurer of choice before the policy kicks in by completing the Options Form in your welcome package.

If you are unsure whether you are covered or not, you can check via the CPF website.

4. Can I cancel it?

As ElderShield is not a mandatory scheme, you can opt-out of it even if you have already been automatically enrolled. 

You can opt-out in the welcome package you will receive before turning 40. There are, of course, several disadvantages if you choose to do so, such as higher premium rates in the future.

5. What if that isn’t enough?

If you feel that a monthly payout of $400 over a period of six years is not enough, you can upgrade to a lifetime plan instead. With ElderShield Premium, this scheme will be extended until you reach the age of 65.

 You can pay the Premium fees using your MediSave account, MediSave of your spouse, parents, children, or grandchildren. 

You can also top up your MediSave account through cash payments if you have insufficient funds. Annual Premium prices depend on your insurer.

Read more about it here.

6. How can you get a higher ElderShield monthly payout?

The payout you require from ElderShield depends on your lifestyle and medical needs. 

 You can use your MediSave account to pay for the enhancement of ElderShield. The maximum amount that you can use from your MediSave account to enhance your ElderShield is $600 yearly.

Here are some figures from Aviva, one of the three ElderShield insurers.

E.g. 1: 

  • 40 year old male
  • Premium of $589.89 medisave yearly
  • Enhance his coverage to $1,600/month for lifetime from the basic ElderShield coverage of $400/month for 6 years.

E.g. 2: 

  • 40 year old female
  • Premium of $554.85 medisave yearly 
  • Enhance her coverage to $1,200/month for lifetime from the basic ElderShield coverage of $400/month for 6 years.

If you’re looking for an even higher ElderShield payout, you can consider using cash in addition to your MediSave account to enhance your ElderShield. 

Singapore residents can top-up their ElderShield to get a maximum payout of $5,000 monthly. In this example, we are using a payout of $2,500 monthly as a gauge. 

E.g. 3: 

  • 40 year old male
  • Premium of $600 medisave and $351.02 cash yearly
  • Enhance his coverage to $2,500/month for lifetime from the basic ElderShield coverage of $400/month for 6 years.

E.g. 4: 

  • 40 year old female

  • Premium of $600 medisave and $645.48 cash yearly 
  • Enhance her coverage to $2,500/month for lifetime from the basic ElderShield coverage of $400/month for 6 years.

For more details on ElderShield premiums, you can reach out to Rayner Goh, Financial Services Consultant, Manulife FA at 97657050 or [email protected].

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