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If you’re in your 30s or getting there soon, CareShield Life, the government’s long-term severe disability insurance, is probably on your radar. It’s also likely that you’re considering supplementing this with a plan from a private insurer, to raise your payouts.
Currently, CareShield Life kicks in only if you’re severely disabled (unable to do at least 3 out of the 6 Activities of Daily Living (ADL), which are washing, dressing, feeding, toileting, walking or moving around, and transferring). Payouts start at $600/month for claimants in 2020 and increase at 2% per annum*. Once a successful new claim is made, payouts will remain fixed for the duration of the severe disability period.
*This rate is confirmed for the first 5 years
But one worry we all have is, whether $600 a month is enough to offset the long-term care costs incurred. These could include caregiver expenses, mobility equipment, daily living expenses and medical fees/equipment which can all add up when there’s income loss, too.
According to a study that insurer Aviva did in 2018, those who are severely disabled might need an average of $2,324 a month. Assuming that working is not possible after severe disability and you only have CareShield Life, you’ll need to dig into your savings for over $1,700 a month for your long-term care expenses.
Even if you lead a healthy lifestyle today, life is uncertain, and disability can happen to anyone, at any age. That’s where a CareShield Life supplement from a private insurer comes in handy. Did you know that if your CareShield Life supplement premiums are within $600/year, this can be entirely covered by your MediSave? This means zero cash outlay!
Aviva is one such insurer providing CareShield Life supplements. Let’s look at what Aviva’s MyLongTermCare and MyLongTermCare Plus plans offer, and what we like about them.
Get up to additional $5,000 a month
With a CareShield Life supplement such as Aviva’s MyLongTermCare, the claimant can get an additional monthly benefit amount of up to $5,000 a month (minimum is $200). For those who made a claim in 2020, they’ll be getting a total of up to $5,600/month — $600 (government) plus up to $5,000 (Aviva). This amount is paid out for as long as the claimant is severely disabled, even if the disability is for life.
Yup, this additional payout is on top of the government’s CareShield Life payouts.
Benefit payouts begin even if your disability is mild
Those with a mild to moderate disability won’t be eligible for the government’s CareShield Life payouts until their condition worsens (severe disability is when you’re unable to perform 3 or more ADLs). However, they may still need long-term care support if they are unable to walk or move around on their own, for example.
That’s where the CareShield Life supplement comes in handy. For Aviva’s MyLongTermCare plans, premiums are waived when the claimant is unable to perform 1 ADL onwards (mild disability). Payouts kick in when the claimant is unable to perform 2 ADLs onwards (moderate disability) for those on the MyLongTermCare Plus plan.
According to the Ministry of Health, 1 in 2 healthy Singaporeans aged 65 could become severely disabled in their lifetime, and may need long-term care. The median duration that Singaporeans could remain in severe disability is 4 years, and about 3 in 10 could remain in severe disability for 10 years or more.
While there’s a possibility that you could recover from a disability, the toll that 4 years or more could have on one’s finances can be devastating. Hence, receiving monthly payouts from CareShield Life and/or the supplement can be helpful to support one’s long-term care costs.
There’s even more financial support
Speaking of finances, Aviva’s MyLongTermCare plans offer additional financial support, beyond supplementing the government’s monthly long-term care benefit.
These include a Lump Sum Benefit, Rehabilitation Benefit (only applicable to Aviva’s MyLongTermCare plan), Dependant Care Benefit, Caregiver Relief Benefit, as well as a Death Benefit.
|Benefit||Condition for payout||MyLongTermCare||MyLongTermCare Plus|
|Lump Sum Benefit||Severe disability (unable to perform 3 ADLs or more)||One-time benefit that is 3 times of the claimant’s first monthly benefit|
|Rehabilitation Benefit||When condition improves but still unable to perform 2 ADLs||50% of claimant’s last monthly benefit, for as long as claimant is unable to perform 2 ADLs||N/A|
|Dependant Care Benefit||When claimant is receiving the monthly benefit or Rehabilitation Benefit and has a child below 22 years old at the point of claim||Additional 20% of claimant’s monthly benefit, for up to 36 months|
|Caregiver Relief Benefit||When claimant is receiving the monthly benefit or Rehabilitation Benefit||Additional 60% of claimant’s monthly benefit, for up to 12 months|
|Waiver of Premium||From mild disability (unable to perform 1 ADL)||Future premiums waived for as long as claimant is unable to perform at least 1 ADL|
|Death Benefit||When claimant dies while receiving monthly benefit or Rehabilitation Benefit||One-off payout of 3 times of claimant’s last paid monthly benefit or Rehabilitation Benefit|
Note: Deferment Period applies for selected benefits.
It’s comforting that Aviva’s MyLongTermCare plan looks at disability and long-term care from a holistic standpoint, as disability usually impacts one’s family, be it the claimant’s spouse, sibling or parent who may become caregivers, as well as their dependants.
There’s flexibility to increase your monthly benefit at key life stages
Life isn’t stagnant, and our financial needs change with time, especially when we go through various key life stages. For example, an individual who gets married is likely looking to start a family, purchase property and so on. Accordingly, their responsibilities increase with a mortgage to pay and kids to care for — they may seek more coverage as they go through key life stage events.
Those who purchase Aviva’s MyLongTermCare plans benefit from its Guaranteed Issuance Option feature, which gives them the flexibility to increase their monthly benefit without further health underwriting during key life stage events. Phew!
Enjoy a perpetual 20% discount on your premiums
Currently, Aviva is giving a perpetual 20% discount on MyLongTermCare and MyLongTermCare Plus plans’ premiums for those who pay a minimum annual premium of $500.
For example, a 35-year-old woman who buys Aviva’s MyLongTermCare plan with a premium term up till she is 98 years old and a monthly benefit payout of $1,200/month, will pay an annual premium of $554.69 (including GST). As she can use $600/annum from her MediSave account to cover this cost, her cash outlay is $0.
This means that those who purchase their CareShield Life supplement from Aviva get more bang for their buck, as the perpetual 20% off means they can get a higher monthly benefit payout at a lower cost. And this can be fully covered by their MediSave monies, too.
Policy: Aviva’s MyLongTermCare
Premium term: Up till 98 years old
Budget: $600/year or less
|If there’s no discount||With 20% perpetual discount|
|Annual premium||$577.80 (including GST)||$554.69 (including GST, and after 20% perpetual discount)|
|Monthly benefit payout||$1,000/month||$1,200/month|
As you can see, the perpetual 20% off translates into a monthly benefit payout that’s $200 higher.
Find out more about Aviva’s MyLongTermCare plans and get a quote to enjoy the perpetual 20% premium discount today.
Terms and conditions apply. This policy is underwritten by Aviva Ltd (“Aviva”). MoneySmart Singapore Pte Ltd (“MoneySmart”) is an Introducer for Aviva and receives remuneration from Aviva. As an Introducer, MoneySmart is not allowed to solicit insurance business, give advice, recommend any product, or be involved in any arrangement of any insurance between you and Aviva. Please direct all enquiries to Aviva. This article is published for general information only and does not have regard to the specific investment objectives, financial situation and particular needs of any specific person. You should read the Product Summary and seek advice from a financial adviser representative before making a commitment to purchase the product. Buying a health insurance policy that is not suitable for you may impact your ability to finance your future healthcare needs.
Information is accurate as at 17 September 2021. Protected up to specified limits by SDIC.