Why are the CareShield Life premiums collected so high?

CareShield Life premiums are calculated such that each age cohort of insureds pay sufficient premiums to support their expected payouts as a cohort. This ensures the long-term sustainability of the insurance fund. 

While CareShield Life insureds are younger, premiums collected are naturally more than payouts in that year due to fewer claims. However, the premiums collected will be carried over to support the payouts in the event of severe disability in the future.

Going forward, an independent CareShield Life Council will regularly review factors like changes in claims experience and longevity and advise the Government on premium adjustments in accordance with an actuarially sound adjustment framework. The Government will consider affordability of premiums when reviewing the Council’s advice on premium adjustments. 

CareShield Life is managed by the Government on a not-for-profit basis. Any excess premiums will be used to benefit insureds and there are legal safeguards to ensure the Government cannot divert CareShield Life and ElderShield Insurance Fund monies for non-prescribed uses.

This information provided here is sourced from the MOH website.