Understanding and optimising your CPF savings
You’ve heard people talk about making full use of their CPF - but how much do you really know?
Let’s break it down.
Our CPF is divided into four accounts - Ordinary, Special, MediSave and Retirement
The Ordinary Account (OA) can be used for housing and related fees. It can also be used for investments that are included under CPFIS (Central Provident Fund Investment Scheme).
The Special Account (SA) is set aside for retirement and can be used to invest in retirement-related financial products as well.
The MediSave Account (MA) can be used for a wide variety of healthcare related expenses - such as paying for insurance premiums (including MediShield Life and CareShield Life), hospitalisation and surgery expenses, health screenings and even having a baby.
The fourth account, which is the Retirement Account (RA), will be automatically created when you reach age 55 and will be used for monthly retirement payouts.
You can make the most of your monies in your Ordinary Account and Special Account through various avenues of investing, but what else can you do with what you have in your MediSave Account?
One way you can do so is supplementing your MediShield Life coverage with an Integrated Shield Plan (IP).
An IP offers additional benefits above those conferred by MediShield Life, an insurance scheme that protects against large healthcare bills. If you choose to supplement with an IP, your MediShield Life coverage will remain as it is a mandatory health insurance scheme for all Singapore Citizens and Permanent Residents.
However, have you ever considered what would happen in the unfortunate event of you sustaining a severe disability?
Sure, your CareShield Life or ElderShield insurance schemes can provide some financial support and cushion the blow. But if you are looking at higher disability payouts that can support earlier disabilities to meet long-term care costs of as much as a few thousand per month, you may consider CareShield Life supplements offered by private insurers.
At the moment, only three private insurers offer CareShield Life supplements - Great Eastern, NTUC Income, and Aviva.
Payouts from all CareShield Life supplements depend on you being unable to perform a number of the six Activities of Daily Living (ADLs) - washing, toileting, dressing, feeding, walking or moving around, and transferring.
GREAT CareShield by Great Eastern is currently the only MediSave-approved supplementary plan where you can receive monthly payouts1 and a lump sum Initial Benefit2 - a payment equivalent to three times the monthly benefit, should you be unable to carry out any one of the six ADLs.
If you fully recover from the disability, the Initial Benefit may be paid again, should there be subsequent episodes where you are unable to perform at least one ADL - provided they are not related to the cause of disabilities for which there was a previous claim for Initial Benefit.
Also, future premiums are waived3 as long as you are unable to carry out at least one ADL - freeing up your MediSave to pay for any future medical expenses.
You may not even need to provide additional cash premium top-ups, as you can pay for GREAT CareShield with your CPF MediSave funds, up to S$600 per calendar year per insured person.
Now that GREAT CareShield has you covered - what about your loved ones, who may need support as well during your recovery? Fret not – this plan has got their backs as well.
This plan also pays you a Dependant Care Benefit for up to 48 months2 upon the inability to perform at least two ADLs, if you have a child below 22 years old4.
Start planning for your future long-term care needs and get 20 per cent off on your premiums throughout your coverage. Take advantage of this premium savings and apply online today!
1Subject to Deferment Period. 50% of the selected Monthly Benefit will be paid out upon the inability to perform 1 ADL. 100% of the selected Monthly Benefit will be paid out upon the inability to perform at least 2 ADLs. The payouts will be for as long as the Life Assured continues to suffer the relevant number of disabilities. 2Subject to Deferment Period. 3Subject to Deferment Period, and for as long as the Life Assured continues to suffer from the disability. 4Refers to age last birthday as at the Claim Date.
Terms and Conditions apply. | The information presented is for general information only and does not have regard to the specific investment objectives, financial situation or particular needs of any particular person. | The above is for general information only. It is not a contract of insurance. The precise terms and conditions of this insurance plan are specified in the policy contract. | GREAT CareShield can be purchased by CareShield Life (CSHL) or ElderShield (ESH) policyholders. If purchased by ESH policyholders before the transfer of ESH to Government administration, GREAT CareShield will be considered as an ESH Supplement regulated under the CPF (Withdrawals for ElderShield Scheme) Regulations. If purchased by ESH policyholders after the transfer of ESH to Government administration or by CSHL policyholders, GREAT CareShield will be considered as a CSHL Supplement regulated under the CareShield Life and Long-Term Care Act. | This is only product information provided by us. You may wish to seek advice from a qualified adviser before buying the product. If you choose not to seek advice from a qualified adviser, you should consider whether the product is suitable for you. Buying health insurance products that are not suitable for you may impact your ability to finance your future healthcare needs. | If you decide that the policy is not suitable after purchasing the policy, you may terminate the policy in accordance with the free-look provision, if any, and the insurer may recover from you any expense incurred by the insurer in underwriting the policy. | This comparison does not include information on all similar products. Great Eastern does not guarantee that all aspects of the products have been illustrated. You may wish to conduct your own comparison for similar products. For more information, you can refer to www.careshieldlife.gov.sg. | This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the Life Insurance Association (LIA) or SDIC websites (www.lia.org.sg or www.sdic.org.sg).
Information is correct as at 18 November 2021.
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