How to increase your disability payouts using JUST Medisave!

First off, lets start with what is already available to us, thanks to our government :)

When we turn 30, the government sends us letters to remind us of our looming thirties and let us know we are now automatically enrolled in something called "Careshield life". In a nutshell, it is a nation-wide insurance program that protects Singaporeans and Permanent Residents of Singapore in the event of disability.

Before you slam the government for sneakily enrolling us into this and making us pay for it via Medisave, here are some things consider from the view of an advisor that has seen much in her days - Most Singaporeans procrastinate getting insurance coverage. Usually only when things take a downturn, would they then take a look and by then, it could be difficult to get themselves fully covered. Additionally, the cost of disability income insurances can be costly with private insurers.

It is my view that the government is taking precautions to safeguard their citizens and prevent a national problem of disabled people unable to care for themselves. Thus, do not opt out of it and encourage your older folks to opt in before it is too late (there is a group of them that had an option to opt in and didn't)

How is "disability" defined?

This gives an overview of the 6 activities of daily living.

Careshield life provides a monthly payout starting from $600 per month, which increases steadily till the point you start to claim. To be eligible, you must not be able to do 3/6 of the above activities of daily living.

2 main reasons why this could not be enough :(

1. $600 per month is something but some of us spend $600 a month just on necessities such as housing, bills, transport, food. Not to mention that inflation would mean that down the road, things will be more expensive.

2. 3/6 ADL is not an easy criterion to hit.

How can you then overcome this without using cash?

You could supplement them with a Careshield life upgrade policy from various insurers using only Medisave. The government also understands that some might need a higher coverage, so they made it optional for Singaporeans and Permanent Residents of Singapore to upgrade their existing Careshield life coverage with a maximum of $600 of Medisave funds per year.

There are several options to choose from, but i would recommend getting the kind of coverage that allows you to claim when you hit 2/6 ADLs. This ensures you get your payouts faster rather than wait till you're totally crippled before you get a payout.

or reference, I'll call this the "plus plan".

For a 30 year old female, this is what additional payouts could look like using $600 per year in Medisave, using a "plus plan"*

$800 monthly payout (from "plus plan") = premium of $589.61 per year payable till age 69.

$1,200 monthly payout (from "plus plan") = premium of $561.88 per year payable till age 99

*Numbers accurate as at 8 April 203

Note that these payouts are also for life. Which would be additional on top of what Careshield life gives you.

Additionally, it come with other benefits that Careshield life doesn't such as death benefit, lumpsum benefit, caregiver relief benefit and dependent care benefit, to name a few.

Honestly, it's a no brainer for most of my clients since Medisave is not touchable expect for integrated shield plans, this and paying for medical bills. It will most definitely come in handy when you need it. Of course, usual underwriting applies so don't wait too long to get it. Ideally, get it the moment you turn 30 years old. With that said, do consult a licensed financial advisor to ascertain if this option is suitable for you.

As usual, I'm here if you'd like to talk about it more. Just slide into my DMs or book an appointment!

I would like to know more!