Eldershield

Dear Mr. Tan,

I will be age 40 this year and CPF Board will soon mail me the brochures on ElderShield. You mentionedthat we should use Medisave sparingly because it is our hard-earned money and it is meant for ourfuture medical expenses.

Should I consider ElderShield; knowing a female at age 40 has to pay at least $5444 (ie $217.76 x 25 years) to get a lifetime coverage with max payout of $28800 (i.e. $400 x 72 months)?
Should I use cash instead to pay for this plan, if it is allowed?

REPLY:

It is a good idea to use cash to pay for Eldershield, if it is allowed. This allows you to earn 4% plus 1% on the money that is kept in your special account

If you have adequate savings for your retirement needs, you can buy Eldershield. I expect that more than 30% will eventually make a claim. If your savings is not sufficient, you can skip Eldershield (as it is of lower priority).