Long-Term Care Planning
By 2050, nearly half of Singapore’s population will be aged 65 and above. According to the Ministry of Health (MOH), an estimated 1 in 2 healthy Singaporeans aged 65 could become severely disabled in their lifetime. In terms of long-term severe disability, it is found that 3 in 10 could remain severely disabled for 10 years or more. These figures will only increase, and Long-term Care plans will become increasingly important, especially for the elderly, those living with disabilities, and their caregivers.
Long-Term Care Planning In Singapore
But what is a Long-term Care plan, and who really needs one?
What is Long Term Care?
According to the Ministry of Health (MOH), Intermediate and Long Term Care (ILTC) services are typically required for persons who need further care after being discharged from an acute hospital as well as community-dwelling seniors who may be frail and need someone to watch over them or to help them with their daily needs. An example of Long Term Care is caregiving services which involve a care aide, or a trained nurse attending to a patient and assisting them with their daily activities.
Fundamentally, Long Term Care is about being able to take care of oneself when one is unable to live independently due to ill health. However, caregiving costs go beyond just hiring a caregiver. It includes the costs of home nursing, installing assisted living facilities, or even staying in a nursing homes, all of which are generally not covered by hospitalisation plans such as MediShield Life and Integrated Shield Plans. Turning to family for support may also not be an option as it might add to the overall financial, psychological, emotional and physical challenges of loved ones.
I’m young/healthy and have an Integrated Shield Plan (ISP), do I need Long Term Care?
It is crucial to remember that disability is no respecter of persons. The advantage of being young and healthy does not guarantee that unexpected accidents and illnesses, which may result in disability, will not happen at. It is therefore vital to have a Long Term Care plan in place, so that in the unfortunate event that a disability occurs, one can make sure that their welfare and finances are taken care of, and that they do not over-rely on their loved ones.
When one is disabled, the initial reaction is always to seek treatment from specialists, which will be covered under your Integrated Shield Plan (ISP). However, upon discharge, one is often found in situations where they need additional help in daily activities, which may affect one’s confidence and quality of life. So while ISP offers you quantity of life, Long Term Care gives you dignity and options, and reduces reliance on one’s family for financial, emotional and physical support.
I have ElderShield/CareShield Life, is that not enough?
ElderShield is a Long Term Care Insurance that was introduced in 2000, for all Singaporeans and Permanent Residents aged 40 years old and above. Payouts are either $300 per month for 5 years, or $400 per month for 6 years, if one is severely disabled. Similar to ElderShield, CareShield Life is also a Long Term Care Insurance scheme that provides basic financial support in the event that Singaporeans become severely disabled. Introduced in 2020, it covers all Singaporeans born in 1980s or later, including those with pre-existing disabilities. Premiums are payable via CPF Medisave or Cash till age 67. Payouts, which will continue for as long as one remains severely disabled, will start at $600 per month in 2020, and will continue to increase until age 67 or when one makes claims, whichever is earlier.
Long-Term Care Planning In Singapore
How much is enough?
The cost of disability goes beyond just medical fees. Often, it includes hiring a caregiver, buying aids to help in daily living, and potential increasing living expenses. While it may not be essential to replace one’s entire income, one other aspect that is often overlooked is the financial commitments to plans that are meant for the family – protection, retirement and hospitalisation plans. The payouts from ElderShield or CareShield Life is often not enough to cover the cost of a professional caregiver, let alone replace the income of the patient or their loved ones’, who may be working less to take care of them.
What are my options?
Currently, all Singaporeans and Permanent Residents have the option to enhance their ElderShield and CareShield Life plans with supplements offered by Aviva, Great Eastern and NTUC Income. Payouts start from $600 per month to $5,000 per month, and one has the option to choose to receive payouts for a limited period of time, or for life. Premiums can be partially paid for using Medisave, capped at $600 per calendar year.
What else should I consider?
While one can take stock of their own finances and have a rough idea of their financial health, it is always advisable to run through your finances with your trusted financial consultant to have a trustworthy and accurate perspective. At the end of the day, premiums for both Integrated Shield Plan and Long Term Care supplements are payable for life. Hence, when planning for retirement, it is crucial to include the premiums of these 2 plans as well, to ensure affordability well into your retirement.
In the event that disability occurs during one’s retirement years, it is also important to consider how the payouts will impact your desired retirement lifestyle, so that life can go on as per normal.
It’s always better to be a week early than a day too late. It isn’t too late to review your portfolio. If you would like to ensure that you and your loved ones are well protected in the event of unexpected health issues, contact me today.
Written by Chua Hui Ting (Executive Financial Services Consultant from TN Advisory Group)
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