Insurance guide: What insurance should your elderly loved ones have in place as they age?

Trying to take account of insurance policies for your loved ones might have left you lost in the sea of wordy papers, confusing numbers, and forgotten login details.

While we aren’t exactly able to help you with their passwords, we can help you to understand what coverage they currently have under their Singaporean citizenship or Permanent Resident (PR) status, such as MediSave, and what other plans they might need to ensure a healthy and carefree retirement!

What is your loved one currently covered with?

If your loved ones are Singapore Citizens or Permanent Residents (PR), they would already be enrolled in a mandatory slew of schemes and plans provided by the Singaporean government.

These policies are designed to ensure that everyone living in Singapore for the long-term are able to afford basic healthcare, especially after they retire and progress into their silver years.

MediSave

MediSave is a savings scheme that requires an employed or self-employed citizen to contribute a percentage of their monthly salary into their MediSave account, which can only be used for hospitalisation expenses and approved medical insurance.

The MediSave account is one of four accounts in the Central Provident Fund (CPF) savings scheme which accrue high interest rates of up to five per cent per annum, the other three being the Ordinary, Special, and Retirement accounts, which are used for other purposes and may not be directly applicable for medical expenses.

If your loved one is currently working or used to draw a good stream of wages that contributed to their CPF savings, it should be expected that they would have accumulated a neat sum in their MediSave account to be tapped into for future healthcare expenses.

Even if your elderly loved one does not have a history of employment and CPF contributions, MediSave savings of their spouse, children, parents, grandchildren, and siblings can be used for their medical bills. This means that your own MediSave savings can act as coverage for your loved ones as well!

Savings in the MediSave account can be used for almost all healthcare-related expenses, such as the following common cases for elderly patients:

• Vaccinations
• Health screenings
• Treatment for acute conditions (e.g. hospitalisation & surgeries)
• Treatment for chronic conditions (e.g. diabetes, hypertension, high cholesterol, heart & kidney diseases, stroke, dementia, & osteoarthritis)
• Cancer treatment
• Psychiatric treatment
• Rehabilitative care​​
• End-of-life (palliative) care

However, MediSave has withdrawal limits which are estimated to only completely cover inexpensive treatments, such as hospitalisation in B2 or C ward types in approved public hospitals and basic healthcare in approved private establishments.

Hence, if you prefer more comfortable or expensive healthcare services for your loved ones, MediSave may not be adequate in providing full coverage.

Moreover, unlike an insurance plan, the amount of money available in MediSave is directly dependent on the amount that you or your loved ones have saved so far through monthly salary contributions, meaning that those who draw a low wage or have been unemployed for most of their lives may not be adequately covered by MediSave.

To overcome this, you may wish to make a top-up to your MediSave account or those of your loved ones and allow the relatively high interest rate of 5per cent per annum to grow those MediSave savings.

Nevertheless, the next level of coverage, MediShield Life, offers extra protection that will be sufficient for most basic healthcare services.

MediShield Life

MediShield Life is a compulsory health insurance plan for every Singapore Citizen and Permanent Resident (PR) that covers a broad range of healthcare-related expenses up to a limit, similar to those of MediSave.

However, unlike MediSave, claims from MediShield Life will not directly deplete your hard-earned savings in MediSave. Instead, you will only have to fork out an affordable premium which is calculated based on your socio-economic status and can be paid for fully using MediSave.

Additionally, although MediShield Life has an annual claims limit, it does not have a lifetime claims limit. As such, MediShield Life ensures that everyone will be covered and can afford basic healthcare for their entire lifetime regardless of their MediSave savings.

As a rule of thumb, any healthcare expenses should first be paid for through MediShield Life. In the unlikely event that the claims limit for the medical condition has been reached, the rest of the bill can be paid via MediSave, cash, or through other insurance plans.

However, it should be noted that although you can pay for the MediShield Life premiums of your loved ones with your MediSave account, you are only allowed to make claims from your MediShield Life policy for your own healthcare expenses, and not for your loved ones.

ElderShield

If your loved ones were born before 1980, they would have been automatically enrolled into the ElderShield scheme. ElderShield is managed by three private insurance providers: Aviva, Great Eastern, and NTUC Income, and is not mandatory, meaning that your loved ones may have opted out of ElderShield.

You can check if they are covered under ElderShield by entering “my cpf Online Services” on the CPF website and logging in using their SingPass details, then navigating to the “Insurance” section under “My Messages”.

Premiums for ElderShield are fully payable by MediSave of the insured or their family members, do not increase over time, and will cease when the insured turns age 65 even though they will continue to be covered by ElderShield until a claim is made.

The total amount of premiums paid by age 65 will add up to around $3700 or $4800 for males and $5100 or $6300 for females, for ElderShield 300 and ElderShield 400 plan types, respectively.

ElderShield provides monthly cash payouts of $300 or $400 (for ElderShield 300 and ElderShield 400 plan types, respectively) in the event that the insured incurs a severe disability, and payouts last for up to five or six years after the claim is made.

This means that for ElderShield 300 and ElderShield 400, the maximum total payout will be $18000 and $28800 respectively, although this may rarely be the case as the exact payout duration for the claim will have to be subjected to scrutiny from the insurance company.

In 2019, enrollment into ElderShield Life ceased and Singaporean Citizens and PRs that turn 30 years old in 2020 onwards will be enrolled into another long-term care insurance plan, known as CareShield Life, instead.

If your loved ones are currently covered by ElderShield, you can choose to help them make the switch to CareShield Life, which provides a higher monthly payout amount that lasts for their whole lifetime.

Together, these schemes will provide vital coverage for the basic healthcare expenses of your loved ones for their lifetime.

Home care solutions at your fingertips

Homage is a home-based care solutions platform connecting professional caregivers with families in Singapore. Be it respite care or long-term care, Homage offers various solutions to help your loved ones recover in the comfort of home.

For more information on Homage services, simply fill up this form to schedule a free consultation with a member of our Care Advisory team.

Insurance to consider for your loved ones

But what if you would like to pay for more comfortable medical facilities, extra medical services, or choose your preferred healthcare professionals to care for your loved ones?

Unfortunately, MediSave and MediShield will probably not be enough to cover those costs completely and you may wish to consider optional add-ons with government-assisted healthcare plans and private insurance providers to manage those future bills.

Upgrading the insurance coverage for your loved ones means that they can enjoy broader coverage, higher payouts, more treatment options, and a higher quality of care without having to bear heavy healthcare costs when the need arises. Read on to find out more about some common ways to do so!

MediSave-approved Private Integrated Shield Plans (IP)

An Integrated Shield Plan (IP) is an optional privately-managed upgrade to the insurance coverage provided by MediShield Life.

This enhanced coverage generally includes the costs of hospitalisation in class B1 or A wards of public hospitals or in private hospitals, and higher claim limits annually and for each medical condition.

Apart from those benefits, multiple levels of IPs offered by different insurance providers may provide other additional benefits, such as the inclusion of organ transplant benefits, a pre-hospitalisation benefit, and a longer post-hospitalisation claim duration.

Of course, an upgrade does mean additional fees. But the good news is, even though IPs are managed by private insurance providers, they can also be fully or partially paid for using MediSave!

The amount that can be deducted from MediSave is dependent on the age of the insured, ranging from $300 per year at ages below 40, to $900 per year at age 71 and above.

The prices of IPs quoted by private insurers already include the premiums for MediShield Life and vary according to the insurance provider, age of the insured, and the extent of coverage.

For example, the premiums of IPs that cover hospitalisation costs in class B1 wards generally hover under the amount deductible from MediSave, while those of IPs that cover hospitalisation costs in private luxury wards will almost definitely be higher than the amount deductible from MediSave and the excess will have to be paid for in cash.

Private insurers for IPs include AIA, Aviva, AXA, Great Eastern, NTUC Income, Prudential, and Raffles Health Insurance.

If you are interested in taking up an IP for your loved ones, you should proceed to consult insurance agents from these companies to understand their various IPs in detail to decide which one will be the most suited for their needs.

If you are unsure whether your loved ones are already covered with an IP, you may check their using the “my cpf Online Services” option on the CPF website, and navigating to the “Insurance” section under “My Messages”. Be sure to prepare their SingPass login details beforehand!

CareShield Life

Similar to MediShield Life, CareShield Life is a government-managed insurance scheme that provides basic protection for life for all Singaporean Citizens and PRs.

CareShield Life was recently introduced in 2020 to succeed the privately-managed ElderShield scheme to provide lifetime cash payouts for long-term care in the case of severe disability.

The payout amount is determined by the year the claim is made. For example, considering that an individual is enrolled into CareShield Life at age 30 in the year 2020, a claim made in 2020 would give them a monthly payout of $600 for the rest of their life, while a claim made after 2057 (they would be 67-years-old or older then) would provide $1200 per month for the rest of their life.

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CareShield Life is optional for those born in 1979 or earlier, as they may already be covered by ElderShield and are given the choice to change over to CareShield Life.

To make the switch more convenient, those that are born between 1970 and 1979 and currently covered under ElderShield 400 will be automatically enrolled into CareShield Life by the end of 2021, but can choose to opt out by 2023.

Others born after 1980, will be automatically and compulsorily insured under CareShield Life once they turn 30 years old.

CareShield Life premiums increase with time and a significant sum of subsidies are provided based on socio-economic status, ensuring that everyone will still remain insured for life.

The premiums are fully payable via MediSave accounts of the insured or those of their family members and will cease at age 67. If your loved ones are born prior to 1979 and do not have private life insurance, you should consider opting them in for CareShield Life. You may wish to begin by estimating their premiums here.

Private insurance coverage

Apart from government-assisted schemes, you may wish to consider forking out extra cash for even greater coverage and higher payouts with insurance plans provided by private insurance companies. These types of plans are generally classified into three types:

Health insurance

These are IPs that are used to enhance the coverage of MediShield Life.

What it covers

Expenses of health-related conditions such as surgery, hospitalisation, and related-outpatient fees. Some IPs may offer broader coverage by including additional benefits such as allowing claims for pre-hospitalization, home nursing, and alternative medicine expenses.

Approximate premium

For plans that cover public hospital stays, premiums range from $700/year for a 65-year-old to $2000/year for a 74-year-old.

For plans that cover private hospital stays, premiums range from $2000/year for a 65-year-old to $5000/year for a 74-year-old.

Personal accident insurance

What it covers

Outpatient expenses as a result of accidents and some infectious diseases. Payouts are also provided for death and permanent disabilities incurred from an accident.

For example, in the unfortunate event that your loved one suffers a fall that results in minor injuries that do not require hospitalisation, the consultation fees, scans, medication, equipment, and other outpatient treatments can generally be reimbursed with personal accident insurance.

Approximate premium

$200–1000/year for persons <65 years old.

Life insurance

What it covers

A lump sum payout for income-replacement in the event of terminal illness, permanent disability, or death. However, do note that if your loved ones are above the age of 65, they may not be able to purchase life insurance as most policies are only available for under 65s in the pink of health.

Approximate premium

A term life insurance costs about $300/year for 55–64 year olds.

Specialised insurance

You can also consider specialised insurance plans for the elderly that encompass aspects from health, personal accident, and life insurance plans which are more applicable for ageing-related risks.

These plans also have less exclusions, meaning that it will be easier for your elderly loved ones to buy into compared to other conventional private insurance plans.

What it covers

A permanent disability payout, hospitalisation, outpatient rehabilitation, and physiotherapy expenses.

Approximate premium

$150–300/year for 50–75 year olds.

Conclusion

Do note that it is often more difficult to buy private insurance for your elderly loved ones, especially if they already have pre-existing conditions such as high blood pressure or heart arrhythmia, or a history of acute illness such as a stroke or heart attack.

Compared to government-managed schemes, private insurance schemes have much more stringent entry requirements and you should approach the agents of a private insurance company to check the eligibility of your loved ones before diving deeper into the myriad of policies and their mind-boggling details.

This article was first published in Homage.