A male at 40 pays $175 for 25 years for the lifetime coverage of Eldershield. If this person opts out of Eldershield and keeps the money in CPF special account to earn 4% a year, the premium will accumulate to $11,220 at age 75.
The chance of making an Eldershield claim before age 75 is quite small, maybe less than 5%. The chance of making a claim after 75 is perhaps less than 30% (but it may increase in the future).
Eldershield pays $400 a month for up to 72 months. However, most people who make the claim do not live for 72 months. I guess that the average payout could be (say) 48 months. This gives $19,200.
If the chance of making a claim is 30%, the average payout is $5,760. This represents a claim ratio of 51%. This claim ratio is quite fair.
However, if the chance of making a claim during the lifetime is less than 30%, then it is better to self-insure, rather than buy Eldershield.
A female pays a premium of $218. This is 25% higher than for a male. The chance of a female making an Eldershield claim is higher than for a male.
I do not have the latest figures on the claim rate. Perhaps, the Ministry of Health may release this figure in the future?
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