What is the Home Protection Scheme (HPS)?
The Home Protection Scheme (HPS) is an insurance that reduces mortgages. The scheme aims to safeguard HDB owners from unforeseen circumstances that could hinder them from repaying their housing loans.
Administered by the Central Provident Fund Board (CPFB), HPS provides claim eligibility to your family if you pass away, get diagnosed with a terminal illness, or become permanently disabled. The claim amount from HPS is the remaining balance of your HDB home loan.
In other words, if you pass away with S$50,000 still owed in your housing loan, HPS will cover the entire amount, relieving your family of the repayment burden.
HPS is comparable to mortgage insurance policies offered by some insurance companies. If you purchase an HDB flat with HPS coverage, there is no need to buy a separate insurance policy. It’s also worth noting that HPS is significantly less expensive than other private mortgage insurance.
How long does coverage under the Home Protection Scheme (HPS) last?
HPS members are covered until they reach age 65 or until their mortgages are paid off, whichever comes first.
How to be eligible for the Home Protection Scheme (HPS) coverage?
To be eligible for HPS coverage, you need to be in good health.
You are not eligible for HPS if you have major pre-existing medical conditions such as kidney failure, cancer, liver failure or transplant, or diabetes with complications like retinopathy or nephropathy. However, you can still use your CPF funds to repay your mortgage.
Rather than having a comprehensive list of pre-existing conditions, the CPF Board reviews each case based on the severity, prognosis, and management of the medical condition and the applicant’s health risk profile.
What kinds of conditions are not covered by HPS claims?
HPS, like other insurance policies, has certain exclusions that prevent claims from being made during the first year of coverage if death or permanent incapacitation is caused by self-harm, suicide, a criminal offence carrying a death sentence, or an intentional criminal act.
Claims also cannot be made under HPS if any of the information provided during the application was incorrect or deceptive or if the claim stemmed from participation in a conflict or riot.
Is the Home Protection Scheme (HPS) mandatory?
The Central Provident Fund (CPF) Board mandates the Home Protection Scheme (HPS) for Singaporeans who use CPF to partially or fully pay for their monthly home loan payments unless they have an exemption or pre-existing condition that disqualifies them.
However, if you are not utilising CPF funds to pay for your home loan, you can still opt for coverage under HPS. HPS exclusively applies to HDB or DBSS flats, but not to private residences such as condominiums, executive condominiums (ECs), HUDC flats, and landed properties. Furthermore, HPS only applies if you have a housing loan.
What are Home Protection Scheme (HPS) exemptions?
You can only be exempt from the Home Protection Scheme (HPS) if your personal insurance plans fully cover the remaining loan amount for your HDB flat in case of death, terminal illness, or permanent disability. This coverage should last until your loan ends or until you turn 65, whichever happens first.
You can use the following types of insurance policies, either traditional or investment-linked, to back your application for exemption:
- Whole Life
- Term Life
- Endowments
- Life Riders (must be attached to a basic policy)
- Mortgage Reducing Term Assurance (MRTA)/Decreasing Term Rider
How much is the Home Protection Scheme (HPS) Premium?
You can estimate your HPS premiums using the Home Protection Scheme Premium Calculator on the CPF website.
HPS premiums are determined based on five factors;
- The outstanding housing loan
- Loan repayment period
- Type of loan (concessionary or market rate)
- Age and gender of the member
- And the percentage share of cover for the flat.
You must only pay premiums for 90% of your HPS coverage period. It means that if you need coverage for 25 years, you will only have to pay premiums for the first 22.5 years. The remaining 2.5 years of coverage will not require any premium payments.
How to pay for the Home Protection Scheme (HPS)?
You can pay your HPS premiums using your CPF Ordinary Account (OA) funds. The amount is automatically deducted on an annual basis.
If your OA does not have enough funds, you must make a cash payment to avoid any impact on your HPS coverage. Alternatively, your co-owner can authorise CPF to deduct premiums from their CPF account to pay for your HPS coverage.
Related article: 9 essential answers about the Home Protection Scheme
