Remember the article when I blogged about my rude shock in finding out that my mum had 2 Eldershield Supplements? Well, here’s another interesting tale with regards to Eldershield but it pertains to my Dad this time round. Here is a story of how my parent’s (Dad) application for ElderShield and a Supplement plan got rejected!
Why ElderShield and Not CareShield Life?
I have previously written about CareShield Life and how it will affect my loved one’s insurance coverage. However, I could not enrol my Dad into CareShield Life as it has not been made available for his age group yet. Rumour has it that it may be launched at the end of 2021 but I decided not to take my chances of waiting anymore even though CareShield Life is more comprehensive than ElderShield. Furthermore, my objective was always to get a Supplement Plan that provides lifetime payouts. It would be an upgrade and is not affected by the type of basic coverage that he has, whether it is ElderShield or CareShield Life. To clarify, enrolment into ElderShield is not compulsory.
After confirming this with my insurance agent, we agreed to proceed with ElderShield 400, complemented by a Supplement Plan administered by a private insurer. I am not naming the private insurer here but it will be one of the 3 (NTUC Income, Great Eastern Life and Aviva). For those who are keen to find out more details about the Supplement Plans available in the market, do refer to this useful comparison guide put by up Ministry of Health (‘MOH’) – COMPARISON_OF_CARESHIELD_LIFE_SUPPLEMENTS.
Premiums For ElderShield and Supplement Plans
One interesting fact I found out from this application exercise was that the premiums for ElderShield are fixed at entry and will stop at the age of 65. An explanation is shown in Diagram 1.
I think it is importantly to highlight that even though premium payment will stop after age 65, the ElderShield remains in force. This means that it will continue to pay out if the life assured makes a claim, say 10 years later at age 75, provided that all conditions for severe disability have been met. That is because the policy is considered as having been fully paid up, allowing the life assured to enjoy lifetime coverage.
Having finally understood the financial commitments, my payment strategy was to use MediSave Account (‘MA’) to pay the premium of the ElderShield and cash for the premium of the Supplement Plan. That is why I have always advocated the prioritisation of topping up MA as the foremost tax relief tool and I am glad that I have recently reached the Basic Healthcare Sum for my MA.
Application For ElderShield and Supplement Plan Got Rejected!
While friends and readers might know me as a great advocate of insurance in one’s financial planning, my Dad is actually the direct opposite. He is a great naysayer of insurance and believes that it represents an unnecessary expense. My agent and I went through mountains to convince him on the merits of ElderShield and the CareShield Supplements. Therefore, when he finally put pen to paper, I heaved a sigh of relief that the battle had finally been won. I probably didn’t know that there is another battle to be fought and counted my proverbial chickens too soon.
Alas, we received news that his application was rejected after the insurer had completed its assessment. The reasons for rejection were 2-fold:
- a recent cataract surgery
- an overnight hospitalisation for abdominal pain
Yup, both his ElderShield and the Supplement Plan applications were rejected for the reasons outlined above. We were told to furnish the supporting medical reports, wait out 1 more year before the private insurer will review his application again. In the meantime, all I can hope is that this 1-year wait/review will not turn out to be consequential.
When I had to break the news that his application was rejected, you could imagine how this merely reinforced his age-old beliefs. To make matters worse, I also expended a considerable amount of goodwill with him on this failed application. To be fair, my financial planner did warn me beforehand that his recent operation and hospitalisation meant that this might not be a straightforward application. Despite his well-meaning intentions, the resolute me still went through the whole process to submit an application because my mantra in life has always been, “If you don’t ask/try, you will never get it”.
Hi Heartland Boy,
Thanks for sharing.
As the bulk of my parents retirement and insurance falls on my plate, I had to juggle between escalating insurance premiums while ensuring my parents enjoy a decent quality of life. Hence, I had to scale back on the insurance coverage in order to increase their CPF balance.
Thanks Derek for dropping by. Understand the trade-offs you have to make but kudos for driving their financial planning to ensure they have a more solid path ahead!
Regarding your decision not to wait for CareShield Life to launch, but instead go for ElderShield400 + supplement, I understand this to plug the protection gap immediaely.
But I am curious – what do you think of the idea that “under government non-profit administration, CareShield Life premiums may be cheaper in the long term”?
By the way, not sure if your agent shared, but your ElderShield can be upgraded to CareShield when the latter launches. The supplement policy will be untouched as it is a stand-alone policy adminstered by the privarte insurer.
I can’t speculate whether it will be true if CareShield Life premiums will be cheaper. My biggest obstacle has always not been cost, but getting my father’s consent. I am aware that the Supplement will be unaffected, thanks for dropping by!
Hi can I ask whether you have since been able to successfully enrol your dad on CareShield Life?
I am also wondering what are your thoughts on getting more senior citizens on CareShield Life – does it make sense from a cost-benefit and timeframe/lifespan perspective? I discovered that my parents (now in their early 70s) are not even on ElderShield 300, yet I feel conflicted looking at the annual premiums.
Yes, I managed to enrol him into CareShield Life. Since his ElderShield and Supplement application got KIV, I am just glad that he has some severe disability insurance for now.