Singapore courts made a record payout for a traffic accident in October.  A boy left a quadriplegic after he was hit by a car at a crosswalk received $1.64 million in damages. “Our lives have been turned upside down by the accident. We have been struggling on my husband’s small salary,” his mother told the Strait Times. Many us could find ourselves in a similar situation in the event of an unexpected accident. More than 50% of Singaporeans do not have enough insurance, according to MoneySENSE.

Our paucity of disability coverage is surprising. One in four of people 20 years of age will become disabled before they retire, according to disabilitycanhappen.org. Not me, you say. You live a conservative life and are super healthy and fit. The same organization estimates that a typical 35-year-old female of average weight, and good health and fitness level has a 24% chance of being disabled for three months or longer during her career. The average disability lasts 1 ½ to two years. Find out what your Personal Disability Quotient (PDQ) is.

How can disability insurance in Singapore help?

Are you prepared if one day you are no longer able to do your job or perform daily activities at home? Would you be able to manage financially if there was an interruption to your income? Could you cover the added healthcare and home aid costs? Disability insurance can help with medical and living expenses during such difficult times, and most policies will provide a lump sum of three months’ benefits upfront.

Disability insurance is designed to help you pay for medical and related expenses such as nursing, home aid, medical equipment, and other assistance. It can also provide you with a stream of income and help pay the bills. As a Singapore citizen, you will be automatically enrolled in Eldershield severe disability coverage when you are 40. And you can even pay for your disability insurance with your MediShield plan.

MediShield (which will provide enhanced services as MediShield Life in November 2015 is the basic government plan that covers hospital bills and selected outpatient treatment, such as dialysis and chemotherapy for cancer.

When deciding what type of severe disability insurance to buy, Singaporeans should consider the following three levels of disability insurance.

Medisave and Medishield Simplified

Tying shoelace

  • Eldershield

Fortunately, if you are a Singapore citizen or a permanent resident with a Medisave account you automatically qualify for severe disability coverage at the age of 40. The plan called Eldershield provides a monthly cash payout for long-term care expenses you incur directly.

Before shopping around for private insurance, you need to know what is covered, how much and for how long under Eldershield plans. Like many government plans, Eldershield provides needed funds when you need them but the payout is limited. After the premiums are paid by cash or Medisave, the plan provides a payout of $300-$400 for 60 to 72 months.

  • Eldershield Supplement

To allow you to increase the monthly payout and the payout period, Eldershield Supplement was introduced. Supplementary coverage is provided by Aviva, GreatEastern Life and NTUC. The chart below provides a comparison of the Eldershield Supplement plans provided by these insurers. Click here for a full comparison of the ElderShield Supplement Plans.  Monthly benefits can be increased considerably, up to $3000 with most plans, and $3500 under Aviva MyCare. The benefit period can be extended from 6 to 12 years, to a lifetime.

Most premiums are priced in increments of $100, and rise dramatically with age. NTUC’s ElderShield Care jumps from $54 for a 40-year-old female to $783 for a 64-year-old female and $595 for a male. Equally important is how long you will pay premiums for. Premiums on Aviva’s ValuePlus 300 plan are paid until age 100, whereas most plans stop premium payments around age 65, or after 20 years.

Standard benefits cover severe disability, which is ascertained based on whether you can perform at least three activities of daily living. The dependent care benefit helps cover expenses if you have children under 21 years of age. Death during severe disability is often a one-time lump sum payment of, say, three months.

Beyond the standard benefits, a few additional benefits may be included. Only Aviva MyCare provides a rehabilitation benefit. If you recover from your severe disability, NTUC will give you a Get-well benefit equivalent to three times your monthly disability.

  • Beyond Eldershield

Eldershield and Eldershield Supplementary plans begin at the age of 40, the minimum age of entry, so you will need separate disability insurance to cover you until then. Even with an Eldershield plan, additional benefit coverage such as for rehabilitation may be required. You have many options for disability coverage. Term disability coverage will tide you over nicely until age 40. Life insurance and accident insurance provide disability coverage. Ensure you have severe disability coverage and are not limited to total and permanent disability coverage. Many property insurance policies will also cover permanent disability leaving you uncovered for the short-term disabilities that many of us experience at some time in our lives.

You do not have to be permanently disabled to be off work and receive social security benefits. Mental disabilities should also be considered. Stress is the number one reason employees take sick leave from work. Does your plan cover you for depression or anxiety disorders and, if yes, what criteria must you meet?

The best way to protect against disability is to maintain a healthy diet and level of fitness and avoid substance abuse. A healthy lifestyle will fend off the lifestyle diseases such as cancer, cardiac disease and diabetes. Ensuring you have enough disability insurance in the case of an unforeseen illness or accident will help you maintain both sound mind and body.

Insurance Questions to Ask Your Financial Consultant

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C.E.O @ The New Savvy
Anna Haotanto is passionate about finance, education, women empowerment and children’s issues. Anna has been featured in CNBC, Forbes, The Straits Times, Business Insider, INC and The Peak Singapore. She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen). Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).