I recently opted out from Eldershield Scheme. Details on the Scheme are as follows:
The reasons why I opt out from such Scheme are as follows
- The premium of this Scheme is paid by CPF Medisave account. Leaving the premium sums in my Medisave account and letting them accumulate (with four to five percent accrued interest), saving a modest amount of money on the side, I would have the almost same amount of the payout from a potential ElderShield claim by age 65.
- The payouts is insufficient to convince me to reconsider rejoining the Scheme.
- The payout is too low to replace the income of a family member who may have to quit the workforce to take care of the incapacitated person. Neither the amount is sufficient to pay for the cost incurred in hiring a nurse in taking care the person for an indefinite amount of time.
- The payout will only kick in if the incapacitated person is unable to perform at least three out of six activities of daily living.
- It is more appropriate to self-insure by relying on the investment portfolio. For example, an investment portfolio involving $100,000 of shares/REITs yielding 4.8% will give one $400 a month for a lifetime and the shares can be transferred to the next-of-kin if the inevitable event occurs.