Why It’s Never Too Early to Get a Long-term Care Insurance Plan
According to MOH, an estimated 1 in 2 healthy Singaporeans aged 65 could become severely disabled in their lifetime. In terms of long-term severe disability, MOH found that 3 in 10 could remain severely disabled for 10 years or more. As Singapore greys, 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.
But what is a long-term care plan, and who really needs one?
Long-term care & Activities of Daily Living
In general, long-term care refers to non-medical care, designed to help those who have problems performing any of the six Activities of Daily Living (ADLs) below:
- Washing – The ability to wash in the bath or shower (including getting into and out of the bath or shower) or wash by other means.
- Dressing – The ability to put on, take off, secure and unfasten all garments and, as appropriate, any braces, artificial limbs or other surgical or medical appliances.
- Feeding – The ability to feed oneself food after it has been prepared and made available.
- Toileting – The ability to use the lavatory or manage bowel and bladder function through the use of protective undergarments or surgical appliances if appropriate.
- Walking or Moving Around – The ability to move indoors from room to room on level surfaces.
- Transferring – The ability to move from a bed to an upright chair or wheelchair, and vice versa.
For some, they may be able to rely on their loved ones, but for others, they may need to seek professional assistance such as in a hospital, nursing home or care centre.
Do I need a long-term care plan?
It’s important to remember that no one is immune to becoming disabled. While you may be young, healthy and able-bodied today, you never know when unexpected accidents and illnesses can occur, and lead to disability at any point in your life. If you’re looking to protect yourself in the event that such unfortunate events occur, it’s recommended that you buy long-term care insurance as early as possible, as you won’t be able to qualify if you already have a debilitating condition.
By 2030, it’s projected that more than a quarter of all Singaporeans will be above 65 years old and by 2050, that number is projected to rise to half the population.
What this means is that as we grow older, we’ll each have fewer able-bodied caregivers available to look after us. Our children may have their own families and responsibilities, and caring for you in times of disability may lead to financial, psychological and physical challenges for your loved ones.
Sure, there are other options you can consider, like nursing homes and private nurses, but these can be expensive. A fundamental question to ask yourself is, can you afford it?
With a long-term care plan, you’re not only prepping for your own welfare and finances should disability occur, but also ensuring you don’t over rely on your loved ones.
Won’t my existing insurance policies cover long-term care?
In short, probably not. Let’s look at the different types of insurance you’re likely to have, and whether or not they’ll cover your long-term care.
Integrated Shield Plans / Health Insurance Plans
Usually the first type of insurance plan that comes to most people’s minds is health insurance. In the event of an illness, health insurance can help to cover some of the costs of your medical bill such as in-hospitalisation, outpatient and follow-up treatments, depending on your policy terms. However, health insurance generally does not cover the cost of long-term care should you become disabled.
Personal Accident Insurance Plans
Personal accident plans are meant to cover you in the event of an accident, providing compensation for injuries, disability or death. While these plans will pay out in the event of disability due to accident, they do not cover disability due to illness, and they typically only last for 3 to 12 months. Some may include covers for home modifications and physiotherapy once a disability has occurred, but again, don’t cover for at-home assistance in the long-term.
Life Insurance & Critical Illness Plans
Most life and critical illness plans will provide a lump sum payout should you be struck by a critical illness or suffer total permanent disability. These payouts are typically meant to act as a financial safety net for the insured, who may be unable to work, whether permanently or for a period of time while he recovers. This particularly benefits those with dependents, so they can maintain their standard of living with little or no disruption.
While it’s possible to use that payout to hire a private caregiver for the insured who’s become disabled, factors such as the amount of sum assured, the age of the insured and what other financial commitments one may have, must be taken into consideration to determine if it would be sufficient for the long haul.
As such, having the right long-term care plan matters. While there may be overlaps between some of your existing policies — personal accident plan, disability income plan, severe disability insurance, etc — it’s important to note that these policies do not substitute one another as they are designed to target different needs. Having the right coverage for long-term care means that your policy should give you monthly payouts for as long as you are disabled and provide benefits such as dependant benefit, support benefit, death benefit, and more.
I have CareShield Life. Isn’t that enough?
CareShield Life is a mandatory, government-administered national scheme, meant to ensure that all Singaporeans have basic protection for their long-term care needs should they become severely disabled. This plan will come into effect on 1 October 2020, starting with those who are born between 1980 to 1990, who will be automatically enrolled into CareShield Life, regardless of pre-existing conditions. Payouts will start at $600 per month in 2020, and will increase until age 67 or when you make claims, whichever is earlier. If you are assessed to be severely disabled, you will receive payouts for as long as you remain so.
However, just like how many choose to supplement their MediShield Life coverage with a private Integrated Shield plan for greater protection, you can also opt to enhance your coverage with a private long-term care plan.
What do you need to consider when getting a long-term care plan?
When choosing a long-term care plan, find one that suits your financial needs and gives you sufficient coverage. Here are some things to consider:
Familiarise yourself with your current coverage
Before purchasing any new plan, you need to be clear of what coverage your existing insurance plans offer. This will help you identify gaps in your protection needs, while ensuring that you don’t fork out extra for coverage you already have.
For example, since CareShield Life provides coverage for severe disability (three or more ADLs), it makes sense to consider plans that provide you greater coverage for severe disability or in the event that you are only moderately disabled (two ADLs). If you have dependents, you might also want to find out if the plan provides dependent benefit for your loved ones.
Compare the coverage amounts and payout schedule
Different insurance plans provide different coverage amounts and modes of payout. For example, total permanent disability plans provide lump sum payouts instead of monthly benefits. If you have recurring expenses, monthly benefit payouts may be a more favourable option. You should also ensure that the benefits will be payable for a reasonable amount of time.
Make sure you can afford the premiums
Another point to consider is the cost of premiums. As with all insurance plans, it’s important to ensure that you have the financial means to pay for it over the long haul. After all, your plan should help you ease your burdens and not add unnecessary strain to you financially.
Consider your current and future state of health
Regardless of your family history, the best time to get a long-term care plan (or any insurance plan really) is while you’re young and healthy to qualify more easily. Those who are older or already have pre-existing health conditions can face more difficulties in applying for long-term care plans. So although you may not need the plans right now, getting one as soon as you can is the key to being sufficiently covered.
Enhance your long-term care coverage
To enhance your CareShield Life Plan, consider getting Income’s Care Secure which provides coverage and comprehensive benefits by supplementing your monthly disability benefits for life in the event of both moderate and severe disabilities. These comprehensive benefits include support benefit, dependent benefit, and death benefit. To be eligible, you must have an existing CareShield Life policy.
Stay ahead of potential health crises
Healthcare costs can be extremely taxing for you and your loved ones so staying prepared for unforeseen circumstances is crucial. Dealing with physical disability is stressful in itself. Just imagine having to cope with the financial stresses on top of that. Life may be unpredictable but we can still take active steps wherever necessary to be financially ready.
Before you’re hit by any major health concerns, consult an Income advisor to learn more about Care Secure and how it can fit into your future health care plans.
Remember — it’s never too early.
This article is meant purely for informational purposes and should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income products mentioned are specified in their respective policy contracts. For customised advice to suit your specific needs, consult an Income insurance advisor.