• Long Term Care Insurance in Singapore

    A long term care (LTC) insurance policy is a type of insurance policy that aims to cover nursing and healthcare costs of senior citizens. Long term care Insurance has become quite popular with many individuals who are facing retirement, opting for this kind of insurance.

    The number of elderly individuals in Singapore has risen in the last many years. In 2005, the number of Singaporeans aged 65 and above were about 270,000. In 2015, the number rose to 440,000. This number is only set to go up by 2030, and is expected to hit about 900,000. Citing these facts, it only becomes necessary that individuals are provided with a comprehensive long term care insurance cover, and know the extent of benefits that can be received from such a type of insurance.

    According to a recent report launched by the Ministry of Health (MOH), at least half the number of Singaporeans aged over 65 are at the risk of developing complex long term conditions that can throw regular life out of gear, necessitating a comprehensive long term care insurance cover.

    Let’s look at the long term care insurance landscape in Singapore and look at its various features and benefits.

    Features of the Long Term Care Insurance Policy

    • A long term care insurance policy can be purchased by individuals either through the government, or through a private insurance provider.
    • The Singaporean government provides a long term care insurance policy under its MediShield Life programme. The MediShield Life programme is a government-sponsored public health insurance programme for Singaporean citizens and Permanent Residents. The long term care insurance policy offered under MediShield Life is known as ElderShield.
    • Under a long term care insurance policy, the individual who is covered will receive a fixed monthly payment every month. The payment can be used for nursing care and medical expenses.
    • There are many private players in the Singaporean market that also provide long term care insurance plans to Singaporeans.
    • Typically, under a long term care insurance policy, benefits in accordance with the policy will be paid if the individual is unable to perform daily activities. Note that activities classified under these “daily activities” will depend on the type of plan purchased and the terms agreed upon under the plan while purchasing it.
    • Most common daily activities that can be classified under the long term care insurance policy include dressing, bathing, feeding, and moving around to perform daily chores.
    • Only if an individual is unable to perform a minimum number of activities under the long term care policy, will the benefits under the policy be paid out.
    • The ElderShield Plan comprises two plans – the ElderShield300 and the ElderShield400. The ElderShield300 pays S$300 a month, while ElderShield400 pays S$400 a month towards long term care.
    • ElderShield400 was the enhanced version of ElderShield300 and came into effect in 2007. New policyhoders were provided with ElderShield400 by default, while ElderShield300 policyholders were given an opportunity to make the switch to ElderShield400.

    How much does long term care cost on an average in Singapore?

    The costs involved in long term care are definitely not meagre – it can cost quite a lot. The cost of nursing in Singapore can vary depending on the requirement, and on an average, can cost about S$800 a month (note that this is just for nursing). The figure can go well above the specified for patients who are bedridden.

    The above-mentioned quotes definitely do not include other medical expenses – say going to the hospital for a visit. You will literally have to burn your savings under a scenario of this sort. Moreover, the costs of hiring a personal maid will add to the financial distress.

    Note that accounting for costs in a nursing home or a specialised hospital is going to cost even more. For instance, PolicyPal, an insurance provider in Singapore, estimates that the cost for a nursing home can go up to S$4,000 a month, and the cost of specialised care will be not less than S$5,000 a month.

    Considering the exorbitant cost of long term care in Singapore, a long term care insurance policy becomes more than just necessary.

    Under the current provision, Singaporean citizens and Permanent Residents who have a monthly per capita income of S$2,600 or below, will get subsidised access to home-based services (between 30% and 80%) and nursing care (between 25% and 75%). The problem with LTC is that middle-income groups and higher-income groups will have to pay straight out of their own pockets for home-based services and nursing care (at least the majority portion of it – nursing care is the most expensive among the costs involved in long term care). Over time, the MOH has gradually increased subsidies to help cover for massive costs, and with today’s numbers, two-thirds of households in Singapore are covered by government-funded healthcare subsidies.

    Is the ElderShield policy offered by the government enough to cover long term care insurance costs?

    Well, we did just take a look at the approximate cost involved for multiple aspects that long term care covers. While ElderShield is definitely a popular long term care insurance policy in Singapore, its coverage does not really meet the standards as far as costs borne (for long term care) by an average individual is concerned.

    As ElderShield is anyways a provision under MediShield Life, it definitely doesn’t hurt to have an ElderShield cover. However, subscribing to a private health insurance provider along with ElderShield is the real deal, as private insurers provide for a larger policy cover under their long term care insurance offering. We will take a look at some long term care insurance plans offered by a few popular players in Singapore to help you get an idea of why private providers have the edge as far as long term care insurance plans are concerned.

    Note that ElderShield, under MediShield Life, only offers a payout of S$300 a month for 5 years, for those individuals who opted for the plan before 2007, and S$400 a month for 6 years for those who opted for the plan post 2007. It isn’t just that the payout is less under ElderShield, the time-period begs for more as well. The scheme is, however, being reviewed by a committee appointed by the government, and may be subject to change in the coming years.

    Advantages

    Let’s take a look at the most common advantages associated with the long term care policy in Singapore. We look at the broad advantages of these plans (not only confined to ElderShield, includes private insurers as well):

    • The policy covers expensive medical treatments that aren’t covered even under Integrated Shield Plans.
    • The humongous cost of nursing is covered under a long term care insurance policy in Singapore.
    • The LTC plan would also cover the cost of hiring a maid in Singapore to help aged individuals go about their daily activities.
    • ElderShield can be upgraded, at a low cost of S$600 per year. Note that if you wish to go for an upgrade, you need to opt for an upgrade provided by three approved insurers – the insurers are approved by CPF.
    • Even under ElderShield, several aspects of healthcare are covered.

    Insurers approved by CPF to provide ElderShield Cover

    • The three insurers approved by CPF are Aviva, NTUC Income, and the Great Eastern ElderShield Comprehensive.
    • You can also opt for an Integrated Shield Plan under this provision, and enhance the extent of your coverage.

    Opting out of the government’s ElderShield Policy

    The question of whether or not it is possible to opt of the government’s long term care policy has often been asked. The answer to this is a Yes. You will have to unsubscribe within the 90-day period after subscribing to the policy, and this can be done easily by filling out an ElderShield opt-out form.

    Note that after payment of your premiums, under the policy, you will have a free-look period of about 60 days, before which you can review your policy and cancel it if you wish, and also receive a refund on your premiums.

    Are there different insurers in Singapore that offer ElderShield?

    Currently, there are three insurers that offer ElderShield plans to Singaporean citizens and Permanent Residents. The plans offered by these insurers is regulated by the government of Singapore. These appointed insurers, besides offering the ordinary ElderShield cover, also offer ElderShield Supplements that come at a higher premium cost.

    Cost of premiums under ElderShield

    The cost of premiums under the Singaporean government’s long term care insurance policy is dependent on the entry age of the policy subscriber. The policy is available to all individuals who are over the age of 40. However, if an individual subscribes to the policy much later, the cost of premiums will go up. Note that as far as ElderShield Supplements is concerned, the cost of premiums will go up even more, if the entry age is high and the ElderShield Supplements plan is purchased.

    The ElderShield Supplements

    As mentioned earlier, the ElderShield Supplement are meant for individuals who want a higher disability insurance cover. The ElderShield Supplements don’t exactly supplement ElderShield, but complement it – at a higher premium cost, you can get better disability coverage under ElderShield Supplements. Note that the premiums for ElderShield can be paid using your Medisave account itself – the same account that is used for paying MediShield Life premiums.

    How does one qualify to receive benefits under ElderShield Life?

    If an individual has to receive benefits under ElderShield Life, he/she must be unable to perform at least three of the following activities:

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

    The above mentioned activities are commonly referred to as the Activities of Daily Living, or ADL in short.

    Thus, Singapore’s health insurance market is quite advanced in a way that it provides older people with an insurance cover against disability and related medical conditions.

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