Your Questions on CPF’s Home Protection Scheme, Answered
Contrary to popular belief, it has nothing to do with fire insurance.
In essence, mortgage insurance is a form of protection that ensures you and/or your family won’t lose their home because of unpaid loans, in the event that you pass away, suffer from terminal illness or become permanently disabled.
One form of it is CPF’s Home Protection Scheme (HPS), which is a mandatory safety net for HDB homeowners who are using their CPF savings to pay for their monthly home loans instalments.
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But how much is the premium? What does it cover and how much does it insure? In this piece, we cover these details and more.
1. What kind of properties are insured under HPS?
HPS mainly covers public housing, including HDB, DBSS and certain HUDC (Housing and Urban Development Corporation) flats. Privatised HUDC flats – like their name suggests – are considered private residential properties, which aren’t covered under HPS.
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So, if your HUDC flat is not privatised/there’s no refinancing in your housing loan/no changes to ownership, you will still be able to enjoy your HPS coverage!
2. Do I have to be insured under HPS?
As mentioned, HPS is compulsory for flat owners who are using their CPF savings to pay for their monthly housing loan instalments.
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However, you can choose to opt-out of HPS if you have the following insurance policies:
- Mortgage Reducing Term Assurance
- Whole life
- Term life
- Life riders (it has to be attached to a basic policy)
- Decreasing term rider
However, the policies must cover your outstanding housing loan up to the full term of loan or 65 years old (whichever is earlier!) before you can apply for exemption, such as via my cpf.
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3. Where do I apply?
It depends on whether you are taking the HDB loan or a bank loan:
|HDB Loan||Bank Loan|
4. When does the HPS cover kick in?
Your HPS cover kicks in when:
- You have signed the legal documents and collected the keys to your home.
- You have completed the loan application with HDB or the approved mortgagee and are legally responsible for said loan.
- You have declared your health and are accepted for HPS coverage.
- After you have paid the first HPS premium.
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Your HPS certificate will include important details such as the sum assured, your share of cover (more about that below), the commencement period, expiry date as well as the address of the insured flat and annual premium.
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You can, as usual, check your current assured sum at my cpf!
5. How does it work?
Your share of the HPS cover should match the proportion of the payable housing instalment. No idea what that means? Here are two scenarios to simplify things:
Scenario A: If you are paying 100% of the monthly housing instalments, you should be insured for 100% of the loan.
Scenario B: If the payment is being split up, you should be insured for the cost that you are paying for while your co-owner will be insured for the remainder (i.e. split 70-30, insured at 70-30 respectively).
Ideally, the total share of the cover should add up to 100% but the amount can be higher or lower, depending on flat owner’s circumstances and preferences.
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Both you and your co-owner can opt to be insured for 100% of the outstanding loan amount. This way, the outstanding home loan will be paid out by the CPF Board if the unforeseen occurs.
6. How much does the HPS premium cost and how do I pay for it?
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The HPS amount that is to be paid depends on the following:
- Outstanding housing loan on your flat
- Loan repayment period of the flat
- Type of loan
- Age and gender of member
But, there’s no need for you to do the math – get a more accurate estimate via CPF Board’s HPS premium calculator!
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You can make payment via:
- Your CPF Ordinary Account
- e-Cashier or e-Nets
- At AXS/SAM stations
- Cash at any SingPost branches or;
- Cheque to the CPF Board
Disclaimer: The information presented here is accurate at the time of writing. In the event that there are future policy updates, you can visit CPF’s website for more details.
Get to know HDB and your home better!
This article was adapted in collaboration with MyNiceHome, HDB’s official website for all things related to home buying and renovation in Singapore.