(Nov 7) THE new ElderShield plans ensure that those who want to will be able to cover themselves properly if they become disabled.
Since August, Aviva, Great Eastern (GE) and NTUC Income have introduced optional supplementary plans to enhance the basic disability insurance, ElderShield.
Introduced in 2002, ElderShield automatically insures Singaporeans and permanent residents against severe disability once they hit age 40, unless they opt out.
For an annual premium deducted from their Medisave account until age 65, they were promised $300 a month over five years if they became disabled.
To make a claim, someone had to be unable to perform at least three out of six activities of daily living, which were eating, bathing, dressing, walking, going to the toilet and getting out of bed or a chair.
But there were complaints that the payout was too small and the period, too short. The Health Ministry revamped the scheme this year.
From Sept 30, those who turn 40 get an enhanced ElderShield: a $400 monthly payout over six years if severe disability strikes. Even better, policyholders can now buy ElderShield Supplements too for greater benefits.
Why you need it
Do you really need more coverage? The answer is yes, if you can afford it.
The payout of the enhanced ElderShield, at just $400 a month, is not much greater than the original plan.
It might just cover the living expenses for a disabled person if he lives at home with a family member as the caregiver.
But costs could go up to $1,000 a month if the family needs to hire a maid, or $1,500 to $2,000 a month if the disabled person is in a private nursing home, said Mr Eddy Cheong, head of risk management and special projects at financial advisory firm Providend.
The odds are, $400 won't be enough, he said. 'Also, payment stops after six years, but you could live longer.'
Mr Patrick Lim, the associate director of financial advisory firm PromiseLand Independent, said: 'How many more years a person can survive after being hit by disability is uncertain. If you are uncomfortable with the uncertainty, you should look at lifetime coverage.'
Which to buy
Mr Cheong suggests three questions to help you decide.
First, what type of care do you expect? Choose a payout that will
meet what you need. Monthly payouts from the three insurers range from $400 to $3,500.
Second, what coverage period do you want? This starts from GE's 10 years to Aviva and Income's lifetime coverage.
Third, is it important that you have a 'rehabilitation benefit'?
This lets someone who recovers slightly from severe disability, but remains unable to perform two activities of daily living, claim half of the monthly payout. Only Aviva offers it as part of its plan.
This is useful as a person who is severely disabled now could get better later given medical advances, Mr Lim said.
GE's ElderShield Comprehensive, which offers an extra payout of $400 to $3,000 a month for 10 years, may be suitable for the cost-conscious.
But its 10 years' coverage is a limitation, the experts said. They prefer Income and Aviva's lifetime coverage.
Another factor in Aviva's favour is that it gives the rehabilitation benefit at premiums which are not much more than other insurers' plans, they said.
Mr Cheong cited an example of a 40-year-old man who wants to get $1,000 a month for life if he becomes disabled.
An Aviva basic plan and supplement costs $695 a year until premiums no longer have to be paid at age 67, or $501 every year. An Income set of plans costs $860 a year till age 65. A GE set costs $549 per year, but coverage lasts only 10 years.
Whatever you decide on, one thing is clear: Buy an ElderShield Supplement if you can afford it.
