Why ElderShield is not bad for the young?

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What’s the chance of making a claim under ElderShield?

I refer to the article “Why ElderShield is not bad for the young” (Straits Times, Mar 27).

It states that “According to data compiled by the Centre for Research on the Economics of Ageing (CREA), where we do our research, among Singapore’s elderly aged 50 to 70, 58 per cent suffer at least one chronic condition and 10 per cent have more than two conditions.

Worse, it is common for chronic conditions such as diabetes and strokes to cause disability. Among individuals with diabetes, 10 per cent could not perform at least one activity of daily living (ADL). After having a stroke, 14 per cent of individuals fail to perform at least three ADLs.”

So, are we saying “Singapore’s elderly aged 50 to 70, 58 per cent suffer at least one chronic condition and 10 per cent have more than two conditions – it is common for chronic conditions such as diabetes and strokes to cause disability – Among individuals with diabetes, 10 per cent could not perform at least one activity of daily living (ADL) – After having a stroke, 14 per cent of individuals fail to perform at least three ADLs”?

Hence, what is the percentage who are projected to “fail to perform at least three ADLs”, which is the basic requirement to claim under ElderShield?

Its akin to telling you – you have a 58 per cent chance to have at least one chronic condition – then a 10 per cent chance to have more than two conditions – then diabetes and strokes cause disability – then with diabetes, 10 per cent could not perform at least one activity of daily living (ADL) – then after having a stroke, 14 per cent of individuals fail to perform at least three ADLs – but never tell you what percentage can get three ADLs in order to claim?

In this connection, why are there no statistics on the claims to premiums ratio of the scheme, from its inception?

$2.6b in premiums, $100m in claims

In this regard, according to the article “Gan Kim Yong: $2.6 billion collected in premiums for ElderShield insurance and around $100 million paid out in claims since 2002” (theonlinecitizen, Feb 18, 2017)

– “from 2002 to end-2015, about $2.6 billion have been collected in premiums for ElderShield insurance and around $100 million have been paid out in claims, adding that about $130 million in premium rebates have been given to policyholders so far, the first tranche in 2007 and another in 2012.”

What is the accumulated interest (investment returns) on the excess premiums over the last 15 years? Will it increase the total excess premiums accumulated to over $3 billion?

When will annual claims exceed premiums?

Also, when do we project that the current trend of premiums exceeding claims every year to end? In a few decades or longer – given that the ElderShield scheme is compulsory (opt-out allowed) and that the population may keep increasing, like in the past (so far in Singapore’s history)?

Claims ratio for last year?

For example, what was the claims to premiums ratio for say the last year?

Not spending a single cent?

When will the Government start to allocate some of the Budget into ElderShield, as it does not cost the Government any money now?

By the way, if the scheme is made mandatory from the lower age of 30 – will the claims to premiums ratio become even lower?

Leong Sze Hian

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.