CareShield Life actuarial report should be public information?

Piggy bank in the hands of the doctor.Piggy bank in the hands of the doctor.

May 28, 2018

The actuarial report for CareShield Life should be made public information, so that Singaporeans can have a better understanding of how it works?

After writing “CareShield Life to replace ElderShield: Claims to premiums statistics?” (May 27) – I would like to suggest that the actuarial report for CareShield Life should be made public information, so that Singaporeans can have a better understanding of how it works?

According to the Straits Times – the estimated total premiums paid for a male, from age 30 to 67 is $7,800, and the estimated total payout assuming 10 years, from 67 to 76, is $144,000, assuming a premium and payout increase of 2 per cent per year.

Using the calculator at www.calculator.net  – the estimated accumulated increasing yearly premiums at 4 per cent interest for the 37 years, from age 30 to 67 is $23,400.

Using the calculator at www.miniwebtool.com – the estimated amount at age 67 to give a monthly payout of $1,200 for 10 years from age 67, at 4 per cent interest is $116,000.

So, for illustrative purposes by using an example (since the actuarial report is not public information) – does it mean that if there is one claim for every 5 persons ($116,000 divided by $23,400) using the example used by the Straits Times – it may not cost the state any money at all?

Similarly, for females – since the starting premium at age 30 is higher, at $253 compared to $206 for males, and the payout is the same – it works out to about one claim for every 4 persons instead of (5 for males).

How likely is this given the statistics for ElderShield that “it was also reported in the media that there were some 1.3 million ElderShield policyholders at the end of last year, with some $3.3 billion contributed (accumulated interest over the years not included) into ElderShield. But only $133 million has been paid out in claims so far, leaving about $3.2 billion with interest” (“Govt launches compulsory CareShield Life while optional ElderShield garners $3.3b with only $133m payouts“, theonlinecitizen, May 28).

Whilst we are talking about making the actuarial report for CareShield Life public information – perhaps we should also do the same for CPF Life and MediShield Life too.

Leong Sze Hian

 

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About the Author

Leong
Leong Sze Hian has served as the 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), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.