Singapore's Long-Term Care Crisis

Singapore’s aging population and rising life expectancy are transforming the landscape of personal finance, particularly when it comes to long-term care. Despite the availability of government schemes like CareShield Life and ElderShield, a significant portion of Singaporeans remain underprepared and underinsured for the substantial costs associated with long-term care. Recent data highlights a stark reality: only one in three Singaporeans have taken out additional insurance to cover these costs, while many underestimate the actual expenses involved. This lack of preparedness is particularly concerning given that long-term care can cost close to S$3,000 a month on average, and individuals may require such care for extended periods, often exceeding a decade. As Singapore moves toward becoming a super-aged society, the financial implications of long-term care are becoming an urgent issue that demands attention from individuals, families, and policymakers alike.

The financial burden of long-term care in Singapore has been steadily increasing, driven by an aging population and the growing complexity of care needs. As of 2025, the average monthly cost of long-term care is approximately S$2,952, a figure that has risen by S$628 since 2018, reflecting an annual inflation rate of around 4%. This upward trend is expected to continue, as advancements in medical technology prolong life and increase the prevalence of chronic conditions requiring long-term support. For instance, care for conditions like dementia or severe disabilities resulting from strokes can be particularly expensive, often necessitating round-the-clock assistance and specialized medical attention. Singlife’s claims data from 2010 to 2024 reveals that individuals typically require long-term care for an average of 10 years, with some cases extending beyond 15 years. This prolonged duration underscores the need for robust financial planning, as the cumulative cost of care can easily run into hundreds of thousands of dollars over a lifetime.

Singapore’s government has implemented several schemes to help mitigate the costs of long-term care, but these programs have limitations that leave significant gaps in coverage. CareShield Life, introduced in 2020, replaced the older ElderShield scheme and provides higher monthly payouts for as long as one remains severely disabled. However, the payouts from CareShield Life may not fully cover the actual costs of long-term care. For example, as of 2025, CareShield Life payouts are set to increase by 2% annually from 2020 levels, but even with these adjustments, the maximum monthly payout might still fall short of the S$3,000 average cost of care. Additionally, CareShield Life primarily covers severe disability, leaving individuals with moderate disabilities or other long-term care needs without adequate support. ElderShield, while still available for those already insured under it, offers even lower payouts—S$300 to S$400 per month for a limited duration—and is no longer open to new applicants.

Given the gaps in national schemes, supplementary private insurance becomes essential for comprehensive coverage. Yet, Singlife’s research reveals that only one in three Singaporeans have taken out such additional insurance, highlighting a significant gap in financial preparedness. Private long-term care insurance plans, offered by providers like Singlife and Income Insurance, can provide higher coverage limits and more flexible terms, helping to bridge the shortfall left by government schemes. These plans often allow for premiums to be paid from Central Provident Fund (CPF) accounts, making them more accessible and affordable for many Singaporeans. For example, Singlife’s long-term care products offer payouts as low as S$200 per month, with premiums that can be drawn from CPF, making it easier for individuals to secure coverage without straining their finances.

The importance of early planning cannot be overstated when it comes to long-term care. Many Singaporeans believe that it is too early to think about long-term care until they are much older, but this mindset can be detrimental. Starting insurance coverage at a younger age not only makes premiums more affordable but also ensures that individuals are covered should they need care earlier in life. Singlife’s data shows that long-term care needs can arise at any age, with the youngest claimant being just 32 years old. Accidents, illnesses, or sudden disabilities can strike unexpectedly, making it essential to have coverage in place well before such events occur. By beginning planning in their 30s or 40s, individuals can spread out the cost of premiums over a longer period and take advantage of lower rates available to younger, healthier individuals.

The lack of preparedness for long-term care can have profound implications for personal finance, affecting not only individuals but also their families and retirement plans. Without adequate insurance, individuals may have to dip into their retirement savings or rely on family support to cover care costs, potentially depleting funds intended for other essential expenses. This can lead to financial strain, particularly for those who have worked hard to build a secure retirement. For instance, using MediSave or personal savings to cover long-term care costs can erode the nest egg meant for later years, leaving individuals vulnerable to other financial shocks. Moreover, the burden of caregiving often falls on family members, who may need to reduce their working hours or leave their jobs entirely to provide care, resulting in lost income and career opportunities.

Some may argue that planning for long-term care at a young age is unnecessary, as the likelihood of needing such care seems remote for those in their 30s or 40s. They might contend that focusing on immediate financial goals, such as buying a home or raising children, takes precedence over preparing for a distant possibility. While these priorities are valid, the unpredictability of health issues means that long-term care needs can arise unexpectedly, as evidenced by cases of young claimants requiring care due to accidents or sudden illnesses. Delaying planning can also lead to higher premiums later in life, as insurance costs increase with age and health risks. By addressing these counterarguments, it becomes clear that early planning is not about diverting resources from current needs but about integrating long-term care into a holistic financial strategy that ensures security across all life stages.

As Singapore continues to grapple with the challenges of an aging population and rising healthcare costs, the issue of long-term care preparedness becomes increasingly critical. While government schemes like CareShield Life provide a foundational layer of protection, they are not sufficient on their own to cover the full costs of long-term care. Supplementary private insurance, combined with early planning and financial preparedness, is essential to ensure that individuals and their families are not left vulnerable. By taking proactive steps now—such as purchasing supplementary insurance, leveraging CPF for premium payments, and starting planning in their 30s or 40s—Singaporeans can secure their financial future and protect themselves against the uncertainties of long-term care needs.