Most people will be interested to find out more about the basic ElderShield when they are reaching 40 years old. This is because they will receive an ElderShield letter notifying them that they will be covered from age 40 onwards.
What is basic ElderShield
It is a long-term care insurance that provides monthly benefit if the person is unable to perform 3 out of 6 activities of daily living (ADLs). The 6 ADLs are
Why should I opt out of my basic ElderShield?
The main argument of opt out is that there are possible scenarios that one will be paying for this insurance, and yet he/she will not be able to claim. Some of the possible scenarios are
- Accident that result in immediate death (e.g. traffic accident)
- Critical illnesses that result in death which falls within 90 days of diagnosis (e.g. unable to perform 3 out of 6 daily activities but death happens before the waiting period is over)
Hence, it is possible that one will be paying for the insurance premium for a couple of years and yet not able to claim due to the scenarios above.
Others decided to opt our due to the follow reasons
- The payout of $300/mth (ElderShield300) or $400 (ElderShield400) is not meaningful as the amount is not enough to hire a maid
- The payout period is too short. Up to 60 months for ElderShield300 or 72 months for ElderShield400
- It is difficult to claim as one needs to be unable to perform 3 out of 6 ADLs. Certain illnesses cause 2 out of 6 ADLs and hence it is not claimable.
Why should I keep my basic ElderShield?
- Accident that result in long-term disability (e.g. traffic accident)
- Critical illnesses that do not results in death but led to loss of motor skills (severe stroke)
We do agree that the coverage is insufficient, and hence it is important to upgrade the coverage with the private insurers. Currently, three insurers provide enhancement coverage, and they are Aviva, Great Eastern and NTUC Income. The benefits of upgrade are
- Higher monthly payout
- The payout can be as long as lifetime
- The condition of claim can be more lenient in which the monthly payout will be payable upon the inability to perform 2 out of 6 ADLs,
- It can be paid by MediSave (up to $600 per person per year)
While we agree that there will be scenarios that one will not be able to claim the basic ElderShield, it is more prudent to keep the basic ElderShield and upgrade if it is financially possible.