Ngee Choon Chia, National University of Singapore - Long Term Care Insurance in Singapore: Assessing the Shield Index

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Title: Long Term Care Insurance in Singapore:  Assessing the Shield Index

Abstract: Singapore has a rapidly aging population.  Long-term care (LTC) is one of the largest financial risks facing elderly in Singapore.  Eldershild, a long-term care insurance provides payouts for elders with severe disability but capped at a maximum of six years. This paper explores the adequacy and comprehensiveness of Eldershield using an actuarial multi-state model.  The transition probabilities and the duration of health states are constructed using data from the Ministry of Health and other disability studies.  Our simulation results echo research findings that ADL dependence is more prevalent in females than males.   Removing the cap on the Eldershield payouts would strengthen the adequacy of Eldershield.  For males, the comprehensiveness (Shield index) will increase to 22.8%, compared to 12.8% when payout duration is capped. For female, the shield index will be 25.8% without cap, compared to 13.5% with cap.  Relaxing the trigger benefit, and having staggered payouts will also help improve the adequacy of the long-term care insurance.

Presenter: Ngee Choon Chia, National University of Singapore.

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