The majority of people are aware of how crucial it is to have insurance and savings for major life events like retirement, marriage, and home ownership.
However, few prepare for the potential for disability. However, long-term disability expenses can stealthily deplete your bank account and upend your sense of security.
The actual cost of disability expenses, the reasons they’re frequently disregarded, and early preparation strategies to prevent becoming a financial burden on you or your family will all be covered in this post.
Age and Accidents Are Not the Only Factors in Disability
People frequently associate disabilities with old age or accidents. However, anyone can become disabled at any time in their life for the following reasons:
- A stroke
- neurological conditions, such as dementia and Parkinson’s
- Complications or treatments for cancer
- Chronic conditions or unexpected injuries
Costs start to accumulate when a disability results in a loss of independence, which entails the need for assistance with everyday activities like eating, dressing, and bathing.
What Are the True Costs of Disability?
The cost of care increases as soon as a person becomes seriously disabled. Here are some estimates of the potential costs of long-term care in Singapore:
- $1,500 to $3,000 per month for home nursing care
- Full-time carer or domestic helper: $800–1,200 per month (including taxes and costs)
- Therapy and rehabilitation: $100 to $500 per session
- Medical supplies (mobilisation aids, nappies): $100 to $300 per month
- $200 to $400 per month for transportation to and from doctor’s appointments
These costs mount up quickly, even with government assistance or subsidies, and they are long-term for many families. Some people need care for ten years or longer.
The Ripple Effect: Families’ Financial Burden
Family members are frequently left to take over when a loved one becomes disabled without adequate financial planning. This may lead to:
- Disruption to carers’ careers
- Depletion of CPF funds or family savings
- Relationship tension brought on by financial and emotional strain
- Retirement plans for the patient and their family have been jeopardised.
Many Singaporean families don’t realise how much of a burden this is until it’s too late. For this reason, long-term care should be prioritised in financial planning as well as health.
How to Guard Against Unexpected Disability Expenses
The following are some doable actions to get ready for the future:
1. Recognise Your Risk
The odds are higher than you might imagine, as 1 in 2 healthy Singaporeans over 65 are predicted to experience severe disability at some point in their lives (MOH, 2018). You can create a strong financial cushion by planning ahead.
2. Obtain a long term care insurance coverage
CareShield Life, Singapore’s national long-term care insurance program, pays out monthly benefits for life after you are unable to carry out at least three of the six activities of daily living. For Singaporeans born in 1980 or later, it is automatically included and is a good place to start when it comes to financial protection. For larger payouts, you can also improve it with CareShield Life Supplements.
3. Take Advantage of MediSave
The finest aspect? MediSave is a cost-effective way to obtain long-term care funding without taking money out of your monthly budget because it allows you to pay the full cost of your CareShield Life premiums.
4. Establish an Emergency Fund
Aim for six to twelve months’ worth of living expenses. While long-term insurance claims are being processed, this fund can help with urgent needs.
5. Consult a Financial Advisor
Based on your goals and budget, a professional can assist you in modelling care scenarios and suggest a combination of private care, CPF planning, and insurance options.
Conclusion
Making Plans for Freedom Rather Than Fear
It is physically and emotionally exhausting to deal with a disability. However, even in the face of obstacles, a sound financial plan can help you maintain your financial independence and freedom.
Early preparation helps you become proactive rather than reactive. You’ll feel secure knowing you’re covered rather than rushing to pay for growing disability costs.
Hope for the Best, Plan for the Worst One of those life curveballs that we hope never occurs is disability, but hope isn’t a plan.
Simple actions now, like learning about CareShield, assessing your insurance, and creating an emergency fund, can have a significant impact later on.
Take action now. If you need help as to where to start, feel free to contact us for a non-obligatory chat.
After all, being ready is more than just self-defence. It’s about saving your loved ones from having to make difficult decisions during already trying times.
Read article 3: “Avoiding the Financial Burden: Why Long-Term Care Planning Is an Act of Love“?
