Severe Disability: Are Singaporeans Unprepared?

An Aviva survey recently revealed that 95% of Singaporeans think severe disability can happen at any time and to anyone. Yet 50% believe they will continue to stay healthy and are unlikely to need long-term care.

Severe disability: a definition

Severe disability is defined by the inability to perform three or more activities of daily living (ADL). These are are basic self-care tasks such as washing, feeding, toileting, dressing, transferring and walking. Disabilities related to performing ADLs are expected to increase from 9% in 2014 to 15% in 2050.

90% of respondents are worried about how they might finance their long-term care needs in the event they become severely disabled. 69% lacked confidence in their or their families’ ability to pay for the necessary healthcare. 64% doubted they could continue to afford daily expenses if they were to become disabled.

How much will it cost to finance long term care needs?

Note that Aviva’s 2018 Long-term Care Study revealed that the average monthly cost amounts to $2,324 (and likely to increase further with inflation). This includes:

aids to help in daily living,
everyday living expenses,
care-giver expenses,
medication and
therapy and miscellaneous expenses.

Where will the money come from?

68% of Singaporeans feel that the individual is responsible for financing, while 83% of these respondents intend to finance their long-term care needs through MediSave.

Currently, Singaporeans aged 30 and above can:

withdraw up to $200 per month to supplement their long-term care needs from their MediSave Care account.
choose to use up to $600 a year from their MediSave to pay for CareShield Life Supplements to obtain higher coverage, and 86% say they are likely to do so
withdraw at least $600 a month from CareShield Life (amount increases if payouts start later)

However, this is far from the $2,324 figure highlighted by Aviva.

What we can do, is get disability insurance during our working years, because according to Aviva article:

it’s easier to secure coverage because of your age and state of health
premiums are cheaper when you’re younger
you have the income to pay premiums
you have dependents who rely on your income to get by should the unexpected happen

Other options are:

upgrading to Careshield Life (if you’re a Singapore Citizen or PR born in 1979 or earlier, you may choose to join CareShield Life from end-2021 onwards if you are not severely disabled)
adding long-term care costs into your financial planning goals
looking after your health (physical, emotional and mental well-being) on a regular basis e.g. exercising and eating well,
settle your Lasting Power of Attorney (LPA), will (and decide on guardianship for your children) and CPF nomination in advance

Special thanks to Aviva for the information.