Considerations when buying insurance for long-term care

The need for long-term care will increase as life expectancies increase and population ages. The incidence of chronic diseases and functional disability is higher in old age, and supporting long-term care needs will also become more difficult as families get smaller and the financial burden on the family to care for your long-term needs will become more substantial.


Long-term care needs

Long-term care refers to the personal and medical care needed by individuals who require assistance with daily activities for a prolonged duration, due to their frailty or adverse health conditions. A sudden disabling event such as stroke or spinal cord injuries, the progression of illnesses such as Parkinson’s Disease, Alzheimer’s Disease and other causes of dementia, multiple sclerosis, or chronic conditions such as diabetes, can lead to disability and the ensuing need for long-term care. The duration of severe disability could last 10 years or even more.

Short-Term disability Long-Term disability
Temporary disability
An impairment that causes the inability to perform work (usually treatable/curable)
Severe disability
Cannot perform least 3 out of 6
Activities of Daily Living (ADLs)

Total and Permanent disability
Inability to work ever again in any occupation, and
Total physical loss, i.e. loss of any two members (eyes or limbs at or above the wrist or ankle)


Depending on the long-term care needs, the long-term care costs may range widely from $750 per month for a trained home caregiver to $9,000 per month or more for specialised care in hospital. Long-term care costs an average of S$2,150 per month.


What is long-term care insurance?

Unlike health insurance policies that focus on covering medical costs, a long-term care insurance policy will reimburse you for the cost of eligible personal care when you become severely disabled and/or require long-term care, especially during old age. Typically, eligible costs include assistance with activities of daily living (or ADLs) such as washing, dressing, feeding, toileting, moving around, transferring.

Activities of Daily Living, ADL(used to assess Severe Disability)
Washing Dressing Feeding Toileting Walking Transferring


Long-term care insurance is like disability insurance for non-treatable or non-curable disability conditions. The insured could receive either a monthly-pay-out or a lump-sum pay-out when he or she become disabled and can no longer perform ADLs. There are different criteria for the different disability terms used in insurance plans, and the pay-outs usually starts after you have been continuously disabled for longer than the deferment period.

Disability insurance is broadly divided into two categories, namely for Income replacement and Long-term care.


Categories Options What is it? Considerations
Income replacement Disability income protection insurance

Covers temporary disability (e.g. impairment that causes inability to perform work, includes both mental and physical disability)


Also provide long-term income if you are disabled and unable to work for long-term, up to a maximum number of months payable.

Has deferment period (varies from 2 months to 6 months)


Pay-out stops or reduces once you are able to go back to work


Disability benefits will be based on your current income or a percentage of it.

Long-Term care


CareShield Life


(enhanced version of ElderShield)


Covers severe disability (e.g. cannot perform least 3 out of 6 ADLs)


Certain pre-existing conditions may be allowed. (i.e. every person who is not severely disabled can also benefit from CareShield Life)

Has deferment period (typically 90 days)


Pay-out is for life-long (no cap in the duration of payout)


Coverage term is lifetime, can make a claim at any age


Payable with Medisave

ElderShield + Supplements


Covers severe disability (e.g. cannot perform least 3 out of 6 ADLs)


Supplements may provide higher payments, longer payout duration and less strict claims criteria for the disability


Offered by 3 appointed insurers only: Aviva, Great Eastern, NTUC Income

Has deferment period (typically 90 days)


Pay-out is only for the first 6 years


Premium starts from age 40-65


Payable with Medisave, but up to limit $600 per year per person insured for supplements


Coverage term is lifetime, can make a claim at any age

Total and Permanent Disability (Rider)


Covers only TPD


Not a stand-alone insurance, but a benefit or rider covered in whole life, term, endowment plans

Has deferment period (at least 6 months)


Provides a lump sum benefit for medium to long term financial assistance, in the event of TPD


Coverage term is up to age 70

Loss of Independence benefit (Rider)


Covers severe disability (e.g. cannot perform least 2/3 out of 6 ADLs)

Part of an annuity retirement insurance plan, offered by ManuLife (RetireReady plan)

Provides monthly income if loss of independence occurs during income pay-out period.

CPF Dependants’ Protection Scheme benefit


Covers TPD and terminal illness


DPS benefit will be paid out to insured members and their families should the insured members pass away or suffer from Terminal Illness or Total Permanent Disability.


Offered by 2 appointed insurers only: Great Eastern, NTUC Income

Pay-out is up to only $46,000


Coverage term is up to age 60


6 Key Considerations

  1. While some may argue that there are overlaps between disability income insurance, total permanent disability (TPD) and severe disability insurance, these policies are not substitutes for one another.
  2. No one knows when you will start needing long-term care. Unlike ElderShield and CareShield that are designed by the Government, most of the products provide coverage only during the policy term, which cease between age 60-70. They do not offer protection for individuals against risk of severe disability due to old age beyond 70 years old.
  3. You can’t put a time limit on how long you will remain in severe disability. It is important to note how long the payout will be and if there are any premium waiver with continued protection. Severe disability may last longer than you expect.
  4. Understand the criteria for the pay-out terms. How long is the deferment period before the policy begins paying benefits? What capacities must you lose? And is there a payback benefit to replace the lost income during the deferment period.
  5. Have a checklist with you. Insurance plans can be complex. To understand the options available, it is important to know what topics to discuss when you consult a professional so as to make your own informed decision. Some areas to look out for:
    • Type of Insurance (e.g. stand-alone/add-on rider)
    • Coverage period (e.g. entry age, age limit, employment status)
    • Pay-out method (e.g. periodically or lifetime or lump-sum)
    • Pay-out amount and duration (e.g. maximum benefit period)
    • Claims eligibility (e.g. criteria to determine disability such as by ADL or TPD)
    • Deferment period (usually 2-6 months, and is there a payback benefit?)
    • Premium structure (e.g. Age-based or Level premium, up to what age, any premium waiver with continued protection)
    • Other benefits (e.g. death benefit during claims period, dependent benefit, get well benefit, care giver benefit, transport benefit, home improvement benefit, mobility aids reimbursement benefit, rehabilitation benefit, disability due to heart attack or stroke benefit, etc)
  6. Make sure the insurance company has a person to notify if premium payments stop. Many families have found out the hard way that when mom or dad developed dementia, he or she quit paying premiums, and the policy lapsed.


Long-term care insurance is a means to mitigate the costs of your care needs and preserve your wealth for the next generation. If you are wealthy enough to self-insure, you should or you probably don't need to. Otherwise, CareShield Life (a government-run scheme) will provide you with some financial protection against long-term care costs.


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