5 Misconceptions Singaporeans Have About Disability Insurance

5 Misconceptions Singaporeans Have About Disability Insurance

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5 Misconceptions Singaporeans Have About Disability Insurance

If you think disability insurance is solely targeted at the elderly, think again. These misconceptions about disability insurance might just be holding you back from a more secure future.

If you’re in your 30s or 40s, chances are you have a loving family of your own, you’ve established your career foothold and most importantly, you’re in the pink of health. With your plate full and everything seemingly in place, the least of your concerns should be purchasing disability insurance, right? Wrong.

Many people think that disability insurance is reserved for the older generation and that hitting the gym regularly makes the possibility of needing it even more remote. However, there are hard facts that indicate it’s time to change that notion. 

Here, we debunk some of the common misconceptions you might have about disability insurance, so you can see for yourself why you shouldn’t put off getting covered. 

1. CareShield Life or ElderShield are good enough

You’re probably familiar with either of the national long-term care insurance schemes, ElderShield or CareShield Life, that you’re automatically enrolled into once you hit a certain age, depending on when you’re born. With both offering monthly disability payouts to help defray long-term care costs if you’re eligible, you might think that this basic coverage is sufficient.

However, as someone who’s able-bodied, you might not be able to imagine the strain on your finances if disability strikes. 

What should you consider when you’re thinking of your long-term care costs?

Source: Aviva

With payouts fixed at S$300 (ElderShield300), S$400 (ElderShield400) and starting from S$600 (CareShield Life) a month in 2020, you may not have enough to cover your medical bills, let alone cover any income loss. 

On top of that, these basic plans do not provide any financial relief for your caregivers who might also be emotionally and financially drained.

2. Young people do not need it

When you set life goals and work towards financial independence, like most people, you probably wouldn’t factor in the possibility of becoming disabled, especially when you’re still well under the big five-o. But the harsh reality is that unless you’re Superman, disability doesn’t discriminate and it can happen to anyone, as the result of an accident or severe illness (touchwood!). 

A study done by the National Council of Civil Service (NCSS) shows that 3.4% of Singaporeans aged between 18 and 49 suffer some form of disability. Younger folks, in particular, will require much more financial and emotional support if it happens, probably because they go on to live for many more years than someone older.

So, there’s a solid case for everyone of every age to get disability insurance. There are advantages for getting it when you’re younger too: not only is it easier to secure coverage because of your age and state of health, premiums would be lower.

3. It is expensive

CareShield Life premiums are priced at S$206 per year for males and S$254 for females (payable by MediSave), while premiums for CareShield Life supplements can range from S$150 to S$3,000 per year for a 30-year-old non-smoker male. However, the premiums depend on your choice of payout amount and premium term – opting for a lower payout or a longer premium term will reduce your annual premiums.

Extra stress on the wallet for these supplements? Not quite. All supplementary plans, including Aviva’s MyLongTermCare and MyLongTermCare Plus, are payable by MediSave. But if your premiums exceed S$600, you will have to fork out cash from your own pocket. 

Taking the example of a 30-year-old healthy male, the annual premium for MyLongTermCare is S$598.52 (after 20% perpetual discount) with a premium term until 98 years of age – payable by MediSave in full – which gives him a S$1,900 monthly benefit payout in the event of severe disability.

As this money comes from your MediSave, you won’t have to worry about the possibility of out-of-pocket expenses unless your premiums exceed the S$600 cap. If there’s insufficient money in your MediSave, you have the option to top up the account. To put things into perspective, paying an annual S$600 premium is akin to passing up on a luxurious staycation in exchange for long-term support and peace of mind.

4. Only claimable for people with ‘severe disability’

While this is true, your idea of severe disability may be someone who is completely bed-ridden. But for most insurance schemes, inclusive of CareShield Life and ElderShield, as long as you are unable to perform at least three out of six ADLs (washing, dressing, feeding, toileting, moving, transferring), you are considered severely disabled. Some plans also waive the premiums once you are unable to perform at least one out of the six ADLs.

Source: Aviva

Plans may vary in terms of disability coverage. For example, the conditions for a severe disability payout for MyLongTermCare are similar to CareShield Life. But if you opt for the MyLongTermCare Plus supplementary plan, you’re eligible for payouts when you are unable to do at least two out of six ADLs.

5. Future children can help finance my long-term care needs

There is a group of people who believe that being disabled is not something in the foreseeable future. Meanwhile, there are others who acknowledge the possibility, but claim that their future offspring would be able to provide for them. The latter therefore do not see the need to purchase disability insurance coverage for themselves.

Being disabled might be temporary in some cases, like a broken limb or a fractured back, but it’s also possible to experience permanent disability arising from a stroke or an unfortunate motor accident. For the latter, it can be difficult to visualise the extent of financial and emotional burden on your family members and children. And if it happens at a young age, you’ll only have your parents to rely on, even as they start ageing. 

The impact of disability is way bigger than you think – on your loved ones and yourself.


Boost your coverage with Aviva’s CareShield Life supplement plans

If you already hold a CareShield Life, why not take the extra step to ensure that you are really sufficiently covered? 

Aviva offers two supplement plans: MyLongTermCare and MyLongTermCare Plus. They’ll ensure that your needs are well taken care of if you become severely disabled in the future. MyLongTermCare and MyLongTermCare Plus are also offered to ElderShield policyholders, you can speak to an advisor for more details.

FeaturesCareShield LifeMyLongTermCareMyLongTermCare Plus
Severe disability definitionInability to perform at least 3 out of 6 ADLsInability to perform at least 3 out of 6 ADLsInability to perform at least 2 out of 6 ADLs
Monthly benefit durationLifetimeLifetimeLifetime
Monthly payout amountFrom S$600 per month (in 2020)S$200 to $5,000 (in increments of S$100) on top of CareShield Life payoutS$200 to $5,000 (in increments of S$100) on top of CareShield Life payout
Choice of payoutsPayouts increase at 2% p.a.Choice of fixed or increasing payouts at a fixed rate of 2% or 3% p.a.Choice of fixed or increasing payouts at a fixed rate of 2% or 3% p.a.
Premium termPay up to policy anniversary after your 67th birthdayPay up to the policy anniversary after your 97th birthday
OR
Pay up to the policy anniversary after your 67th birthday or for 20 years from entry age, whichever is later
Pay up to the policy anniversary after your 97th birthday
OR
Pay up to the policy anniversary after your 67th birthday or for 20 years from entry age, whichever is later

Aside from CareShield Life’s monthly payouts, you’ll receive an additional S$200 to S$5,000 per month. You’ll also get to choose between fixed or increasing payouts, at a fixed rate of 2% or 3% p.a.

Promotion: Enjoy a 20% perpetual premium discount when you sign up for MyLongTermCare or MyLongTermCare Plus with a minimum annual premium of S$500. Terms and conditions apply.

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Additional benefits

BenefitsCondition for payoutMyLongTermCareMyLongTermCare Plus
Lump Sum BenefitSeverely disabledA one-time benefit that is 3 times of your first monthly benefitA one-time benefit that is 3 times of your first monthly benefit
Rehabilitation BenefitCondition improves but you’re still unable to perform at least 2 ADL50% of your last monthly benefit, as long as you’re unable to perform at least 2 ADLNA
Dependent Care BenefitWhen you’re:
– Receiving monthly benefit or Rehabilitation Benefit
– Have a child 22 age next birthday and below at point of claim
An additional 20% of your monthly benefit, for up to 36 monthsAn additional 20% of your monthly benefit, for up to 36 months
Caregiver Relief BenefitReceiving monthly benefit or Rehabilitation BenefitAn additional 60% of your monthly benefit, for up to 12 monthsAn additional 60% of your monthly benefit, for up to 12 months
Waiver of PremiumUnable to perform at least 1 ADLFuture premiums are waived, for as long as you’re unable to perform at least 1 ADLFuture premiums are waived, for as long as you’re unable to perform at least 1 ADL
Death BenefitWhen death occurs while you’re receiving the monthly benefit or Rehabilitation BenefitOne-off payout of 3 times of your last paid monthly benefit or Rehabilitation BenefitOne-off payout of 3 times of your last paid monthly benefit or Rehabilitation Benefit

Not only will you be able to receive monthly benefit payouts, but you are also entitled to a one-time Lump Sum Benefit that is three times your first monthly benefit to help cushion your finances. This can help to pay for fringe costs that you incur such as transportation rides or home assistance accessories. 

Your loved ones taking care of you will also benefit under the Caregiver Relief Benefit that’ll give you an additional 60% of your monthly benefits up to a year. If you’re a parent, these supplement plans also take your children into account by giving you an additional 20% of your monthly payout for up to three years under the Dependent Care Benefit.

Even if you don’t meet the severe disability definition, rest assured knowing that premiums are waived once you are unable to complete at least one out of six ADLs.

Though disability insurance doesn’t come free, opting for a CareShield Life supplementary plan not only provides you with peace of mind, but also gives a bigger financial safety net to tide you over rough times when you need it most.  

Promotion: Enjoy a 20% perpetual premium discount when you sign up for MyLongTermCare or MyLongTermCare Plus with a minimum annual premium of S$500. Terms and conditions apply.

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This article is written in partnership with Aviva.

Terms and conditions apply. 


This policy is underwritten by Aviva Ltd. 

This material is published for general information only and does not have regard to the specific investment objectives, financial situation and particular needs of any specific person. You should read the Product Summary and seek advice from a financial adviser representative before making a commitment to purchase the product.

As this product has no savings or investment feature, there is no cash value if the policy ends or if the policy is terminated prematurely. Buying a health insurance policy that is not suitable for you may impact your ability to finance your future healthcare needs. You need to have a basic CareShield Life (CSHL) or ElderShield (ESH) policy before purchasing MyLongTermCare or MyLongTermCare Plus (“Supplements”). Supplements purchased by CSHL policyholders are regulated under the CareShield Life and Long-term Care Act. Supplements purchased by ESH policyholders before the transfer of ESH to Government administration are considered ESH Supplements, which are regulated under the Central Provident Fund (Withdrawals for ElderShield Scheme) Regulations. After the transfer, they are considered CSHL Supplements, regulated under the CareShield Life and Long-Term Care Act.

Protected up to specified limits by SDIC.

Information is accurate as of 8 September 2021.


By Deborah Gan
A mahjong addict with an undying love for dogs, Deborah is always on the hunt for cheap deals because she is always broke. That is why she is attempting to be more financially savvy to be.. less broke.