Majority of the assets in the MediShield Life Fund are set aside as liabilities to honour future commitments such as premium rebates and future claims for patients who have started on multi-year recurrent treatments, such as dialysis and chemotherapy. In addition, capital is also set aside to ensure that MediShield Life can absorb the impact from adverse events and continue to pay out claims, without requiring sudden increases in premiums.

As payouts have increased over the years due to medical inflation and higher claims utilisation, premiums have to be increased in order for the Fund to continue meeting its commitments. Higher premiums will also support the higher claim limits for existing benefits and the expansion to new benefits.