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Should I enroll in Careshield Life?

Friday, December 31, 2021

Some time back, a reader asked me about Careshield Life and being the lazy person that I am, I didn't want to blog about it.

I simply said that my attitude towards Careshield Life is the same as my attitude towards Eldershield which is the truth.

They are both disability insurance products and if we have the best insurance in life, we don't really need these.

See:

Eldershield: Is it really necessary?

and

Best insurance to have in life.




However, as many people do not have passive income that is sufficient for them to stop working, it is a good idea for them to have disability insurance.

For this group of people, Careshield Life is a better product than Eldershield for the following reasons:

1. Lifetime coverage.

We only need to pay till we are 67 years old or for 10 years after joining, whichever is later, and we are covered for life.

2. Lifetime cash payouts.

We get monthly payouts for as long as we are severely disabled while Eldershield only pays for up to 6 years.

3. Payouts increase over time.

Eldershield pays a fixed amount of $400 a month while Careshield Life pays $612 a month and it will increase at 2% per year.




Low income families probably need Careshield Life the most and they will receive significant subsidies. 

For those of us who are older, we will get incentives for joining Careshield Life by 31 Dec 2023.

I received a letter from the Ministry of Health to automatically enroll in Careshield Life last month. 

Based on my age, I will get a small incentive to do so too.

Since I was already enrolled in Eldershield to help lower the cost of collective risk sharing at the suggestion of a friend, I went with the automatic enrollment.




Careshield Life is a low cost disability insurance product. 

For me, the premium is $200+ in the first year after subsidy and incentive. 

I also like the idea that I am doing some good for society with my enrollment.

For anyone who is interested in finding out more, do a login with your Singpass at:

careshieldlife.gov.sg/cshl-premium-checker 

to check on the premiums.




To be fair, although self insurance is probably the best form of insurance, we can never tell if our passive income could be impacted negatively at any point in time.

So, having some disability insurance is probably not a bad thing even for those of us who have the best insurance in life.

Related post:
Total and Permanent Disability Insurance.




6 comments:

Justin said...

Thanks AK for your always helpful articles. Regarding the period of premium payment, I think the 10 years payment period only applies to those that are 59 years and older from 6 Nov 2021. The rest of us still need to pay till we are 67 years old.

https://www.careshieldlife.gov.sg/faqs/careshield-life.html#:~:text=Base%20premiums%20are%20paid%20from%20the%20age%20you%20join%20until%20age%2067%2C%20or%20for%20a%20period%20of%2010%20years%20for%20those%20who%20join%20at%20age%2059%20or%20older%20from%206%20November%202021.

AK71 said...

Hi Justin,

Yes, I am not quite there yet. ;p

I edited the blog soon after publishing it but you read faster than I edit. LOL. :D

David said...

Hi AK,
Thank you very much for the prompt reply.

I misread. Government 'incentive' to enrol Careshield life[those who born Before 1970] is 31Dec2023. Not year 2021.

Will take some time to understand it.
It seems if I have enrolled to Careshield Life, it will replace my Existing Eldershield400.
I will try to study how this will affect my Integrated Shield Plans that i have bought..

Wishing you & family a Healthy + Happy 2022.
I should not delved into Careshield so much on last day of 2021:-)

I have contributed to my SRS.
In early Jan 2022, i plan to top up my Medisave.
From 1Jan2022, Medisave ceiling will be $66000.

Best Regards
David

AK71 said...

Hi David,

Yes, as long as we enroll by the end of 2023, we will get the incentives which will be paid out over a 10 year period.

You are also right that once we enroll in Careshield Life, our Eldershield coverage will cease.

I don't think Careshield Life will affect Medishield Life or our private shield plans.

One is a disability insurance and the other is a H&S insurance.

Thanks for sharing your plan with SRS and CPF.

Sounds good. Gambatte! :D

Sunny said...

AK
years ago, I opted in elder sheld, as I have auto opt in care shield but not sure how to stop payment for the eldershield?

Thanks

AK71 said...

Hi Sunny,

Once we enroll in Careshield Life, it will replace Eldershield.

So, no action is required on our part.

No need to worry. :)


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