[SINGAPORE] That we could live very long lives to our 90s and beyond is surely a blessing – but it’s also a daunting prospect, at least to me.
Will I be in good health? If not, would I have the resources to fund possibly many years in a disability that could be crippling?
Last week, the Ministry of Health (MOH) unveiled an enhancement to Singapore’s national long-term care insurance, CareShield Life. From next year, the scheme’s monthly benefit will grow at a rate of 4 per cent a year, from 2 per cent currently. To cushion the expected premium rises, the government is providing S$570 million in premium support over the next five years.
The pace at which Singapore is ageing is worrisome. Earlier this year, Singlife published a paper, Long-term Care: From Awareness to Action. Singapore, it said, will be “super aged” in 2026, with one in five residents aged 65 and older. By 2030, one in four – or nearly one million Singaporeans – will be 65 or older.
A survey it conducted last year found that long-term care can cost S$3,000 a month, but half of those surveyed believe it costs significantly less.
The heavy burden of long-term care falls not just on public health services, but also on families and personal finances. Unless you are fortunate enough to have a deep cash pile, you may have to brace yourself for many years of health expenses. Younger Singaporeans may also find their savings depleted by the obligation to care for elders.
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CareShield Life is estimated to provide a monthly payout of S$676 in 2026. With the enhanced payout growth rate of 4 per cent, this rises to S$806 in 2030. But that is still just around 27 per cent of the estimated long-term care cost of S$3,000.
The MOH estimates that one in two Singapore residents at some point in their lives could develop severe disability, defined as the inability to independently perform at least three out of six activities of daily living (ADLs). ADLs comprise feeding, dressing, toileting, washing, mobility and transferring. Those who need help performing ADLs are also likely to need long-term care services.
Sobering
Singlife’s paper surfaces some sobering insights.
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The risk of severe disability isn’t confined to the elderly. Singlife’s youngest long-term care insurance claimant was just 32 years old when he made a claim – just a year after he bought the cover at 31. The average age of a claimant is 58. Based on MOH data, the median age of claimants in CareShield Life is 52, which means that half are in their 30s and 40s.
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According to Singlife’s claims data from 2010 to 2024, the average duration of a claim is 10 years, but it could be much longer. The insurer’s longest active claimant has been receiving payouts for more than 15 years.
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Not surprisingly, stroke is the top cause of a disability claim (50 per cent), followed by cancer (17 per cent) and Parkinson’s disease, Alzheimer’s and dementia (14 per cent).
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The cost of long-term care is the “silent threat” to retirement. Singlife estimates that long-term care can add S$420,000 to one’s retirement needs. This is based on the assumption of a monthly care expense of S$2,952 over 10 years, growing by an annual inflation rate of 4 per cent.
The good news is that penetration of CareShield Life and Eldershield appears to be high. Based on MOH data, eight in 10 Singapore citizens and permanent residents are in the scheme. Only one in three, however, has subscribed to a supplement.
Beyond CareShield Life
Just like in the Integrated Shield Plan market, supplements for ElderShield/CareShield Life are offered by private insurers. There are three insurers in the market – Singlife, Great Eastern and Income. Up to S$600 from Medisave can be used to pay for premiums.
The supplements offer a range of benefits going well beyond the basic scheme. The biggest is the lower threshold to qualify for a claim. The lowest is one or two ADLs, but you need to read the fine print on the limitations to the benefit for less than three ADLs.
Note that the CareShield Life Council, whose recommendations were accepted by the government, had discussed lowering the claims threshold of three out of six ADLs. But the council recommended against this, because of the need to keep CareShield Life affordable. Lowering the threshold to two out of six ADLs would cause premiums to double, it was revealed in a press conference last week.
Associate professor and council member Gan Wee Hoe said: “There was a lot of feedback that it was important to make sure it’s affordable. Really, between affordability and features, there is a tradeoff.”
Still, there may be demand for products that cover mild to moderate disability. Income will launch a new product this month, to offer more comprehensive long-term care cover “spanning the spectrum of mild to severe disabilities”.
Income chief customer officer Dhiren Amin said: “As Singapore’s demographic and healthcare landscape evolves, with rising medical costs and longer average lifespans, the needs and challenges relating to disability protection have also shifted. Thus, in line with the recent MOH announcements, we will also be taking a holistic review of the existing benefits under Care Secure. More immediately, we see the need to protect people with mild disability, which is the inability to perform one ADL as protection gap in this area exists today.”
Highlights of supplements’ benefits
Here’s a bird’s eye view of what the supplements can offer. The accompanying graphic reflects a selection of plans. Singlife, for instance, has two supplements, and the graphic reflects only the higher-level Singlife CareShield Plus.
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Initial lump sum benefit: The supplements offer an initial lump sum benefit, which could be three or six times the monthly benefit. To qualify, the policyholder must be unable to perform at least one or two ADLs. Income’s Care Secure, for instance, can pay three times the monthly benefit for at least two ADLs, or six times the benefit for at least three ADLs.
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Claims eligibility: For GE’s Great CareShield Supreme, at least one ADL will qualify for 50 per cent of the benefit. Two ADLs would qualify for the full benefit. For Singlife’s CareShield Plus, one ADL would qualify for the full benefit for 12 months. Income’s Care Secure takes a different approach in the quantum of the benefit to be paid. For at least two ADLs, the policyholder qualifies for the full benefit. For three ADLs – which is similar to CareShield Life – the benefit is net of the CareShield Life payout.
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Monthly benefit boost: The range of possible benefits is significantly higher – up to S$5,000 for all the supplements, depending on the policyholder’s choice. The premium will be based on the size of the benefit, entry age, gender and the premium term. Premiums are not guaranteed and may be adjusted based on the insurers’ experience. Since there is underwriting at point of purchase, a pre-existing condition may require an additional loading.
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Dependant and caregiver relief benefits. All three insurers offer dependant benefit ranging between 20 and 30 per cent of the monthly benefit, payable for between 36 and 48 months. Singlife and GE offer caregiver relief benefit of 60 per cent of the monthly benefit for up to 12 months.
