Sixty-Seven Percent Of 1.2 Million To Enjoy The Benefits Of Eldershield

07 Oct 2002

Sixty-seven percent of 1.2million Singaporeans and Permanent Residents (PRs) aged 40-69 years are now covered under ElderShield, a severe disability insurance scheme.

Low opt out rate among those aged 40-45

The opt-out rate for those in the age group 40-45 is the lowest at about 27%. This is a heartening trend as it means that future ElderShield cohorts, i.e. people turning 40 each month, are likely to stay with ElderShield as well, based on the experience of this same age group in the initial cohort (See attached Annex A for opt out figures).

Auto-coverage for those who turn 40 on a monthly basis has already begun. Since July, the two insurers have mailed out auto-cover packages to those who turn age 40 on a monthly basis. For example, those who turn 40 in the month of Oct 2002, would have received their ElderShield auto-cover packages in end-July, and they would have up till 31 Oct 02 to opt out of the scheme.

Opt-outs primarily from lower and very high income groups

The majority of those who have opted out of ElderShield are either in the lower income group, or the very high-income group. Of those who have opted out, almost half (42%) have monthly incomes of less than $1,500, and about 11% belong to the monthly income group of more than $6,000. About 35% of those with monthly income less than $1,500 opted out. For those with monthly income of $1500 or more, the opt out rate varies from 22 - 30%..

It is likely that those in the lower income groups choose to opt out as they are concerned about not being able to sustain premium payments in the long run. This is practical, as they would like to keep their Medisave for future hospitalisation use. In the event of severe disabilities, they could rely on government subsidy or Medifund if they need financial help for step-down care services.

For those in the very high-income group, they may already have other alternatives besides ElderShield to take care of their expenses in the event of severe disabilities. Nevertheless, they may wish to consider remaining on ElderShield for added financial coverage.

Opt-back Deadline

As many as 8,475 people have also opted back into the scheme as they have a better understanding of how ElderShield can help them cope with the expenses of long term care if they become disabled due to old age, illness or any other reason. We would like to urge those who have opted out to reconsider their decision carefully. If they decide to join ElderShield subsequently, they would be subject to underwriting, which means that their applications may be rejected if they suffer from medical conditions that have a high chance of leading to disability later on. The insurers have agreed to extend the deadline for those who have opted out to reconsider their decisions. Those who have opted out but wish to opt back in, have until 31 Dec 02 to inform their appointed insurers.

The Ministry would like to encourage all Singaporeans and PRs eligible for ElderShield to consider the benefits of the scheme and any future enhancements. Given the high cost of long-term care and that a proportion of elderly will require such care, risk pooling through insurance, as compared to personal savings, is a more practical approach to providing financial protection for severe disabilities.