Background Singapore is ageing rapidly and has one of the longest life expectancies in the World. Long-term care also represents one of the largest financial risks of the elderly. ElderShield, a long-term care insurance scheme provides payouts up to six years for elders with severe disability - having three or more ADL disabilities. The six years coverage might be insufficient due to increases in the duration of disability and longer life expectancy. Methods In this paper, we studied all elders admitted to community hospitals in Singapore from 1996 to 2005, linked with national death records until December 2011. We modelled their survival risk after discharge from community hospitals using Cox proportional-hazards regression, taking into account ADL disability, health status and other socio-demographic covariates. Results Individuals with higher ADL disability counts have a higher hazard ratio (HR: 1.28,1.74,1.95 for mild, moderate and severe disability respectively compared to those with no disability), males had a higher hazard ratio compared to females (HR:1.40), older age (HR:1.87), being in a higher subsidy ward class (HR: 1.09 and 1.12 for moderate and high subsidy respectively compared to no/low subsidy) and had greater comorbidity burden (HR: 1.17, 1.14, 1.39 for mild, moderate and severe comorbidity burden respectively compared to those with no comorbidity burden). We also found that survival probabilities for individuals with two disabilities were not statistically different from those with 3+ ADL disabilities. In addition, more elders with severe disability were living longer than six years. Conclusions This has implications on long-term care policies in the context of ElderShield, as the disability insurance use severe ADL disabilities as the qualifying criteria for payout, capped at six years. While the CareShield Life Plan achieves more coverage than ElderShield, the payment into the plan also increases. Nevertheless, ensuring fiscal sustainability and affordable premium is challenging for any government, especially with Singapore’s rapidly ageing demography. We conclude that the expansion of coverage from six years to life is timely as Singaporeans are living longer with ADL disability. These payouts will be helpful for the disabled elders and their family, protecting them against some financial risk.