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.