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The Home Protection Scheme (HPS) is an insurance scheme provided by the CPF Board that ensures that mortgage payments on your HDB property continue to be made in the event that the original owner of the property is unable to do so due to terminal illness (TI), total permanent disability (TPD), or death. It exists under the purview of CPF, to ensure that family members of the owner (who in this case is incapacitated) will not lose the home they are staying in in the wake of such tragedy.
How does it work?
To apply, the original owner(s) will file applications with CPF to be covered under the insurance scheme. The applicants will need to submit a health declaration, and in some cases may be required to go for a medical examination. Once all documentation is submitted and the application is approved, the coverage is extended over the property in exchange for a premium that is paid every month from your CPF Ordinary Account.
This coverage will continue until either the mortgage is paid off in its entirety, or the owner turns 65.
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Despite the fancy name, insurance premiums are simply fees that you pay to the insurer in exchange for the guarantee of coverage. In this case, the premium for the Home Protection Scheme is calculated based on a variety of factors relating to the property, the loan (total loan amount, remaining outstanding amount, remaining term or payment period, loan types), and the owner’s information. You will also only be paying the premium for only 90% of the cover period – which is why they ask for the above information. Like with other insurances, premiums are non-refundable.
In the case of co-owners (more than one person owning a flat, such as with couples), the premiums can be paid separately unless one owner chooses to cover the entire property on their own. Co-owners who take on a higher percentage share of coverage will also be paying higher premiums, as they are covering more of the property in a sense. You can use the CPF’s HPS Premium Calculator to estimate what your premium would be.
You will be paying the same premium amount throughout the entirety of your coverage period, and as mentioned this amount can be found on the HPS certificate provided. You will also see this reflected in your CPF’s Yearly Statement of Account, which shows all transactions made for your accounts.
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As mentioned above, this premium is deducted directly from your CPF Ordinary Account (OA). Do ensure that your account has sufficient funds in it to pay for the schemes you are signed up for, including HPS as in this case, you will only have a grace period of two months to ensure that late premiums are paid before your HPS policy is cancelled. Additionally, if you are also paying your monthly housing payments from your OA, do note that the payment of your HPS premium will take precedence over your monthly payments to ensure that coverage is available. You will not be able to make any other payments unless the insurance premium has been paid or the grace period has lapsed.
During the grace period, if you are anticipating deposits (for example from work-related CPF contributions) that are able to cover the premium shortfall, you do not need to make deposits. Due to the priority of the HPS cover, CPF will reserve the money in the account until the premium amount is met, before deducting it from the OA.
In the case where an owner has allowed the premium to lapse due to insufficient contributions, (whether in the face of TI, TPD, death, or otherwise), family members who co-own the flat can reach out to CPF to allow premium deductions from their CPF OA instead of the owner’s account. This can be done online via myCPF as well – you simply log in with SingPass, and then go into the Home Protection Scheme (HPS) section under My Requests and select the option for ‘Authorise the Use of Ordinary Account Savings for Insured’s HPS Premium’. Once approved, the remaining balance in the insured’s OA will first be used to pay the premium – thus, the first deduction from the co-owner’s account should be the balance left over after the deduction from the original owner’s account.
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Payments are made annually – every year, only two co-owners can make payments for the premium (the original insured, and a co-owner). However, the co-owner does not have to stay the same each year; that is, a different co-owner (if available) can help make the payment for a premium shortfall for subsequent payments.
These standing instructions for co-owners to help pay for premium shortfalls can be terminated by writing to CPF to notify – do include the CPF account numbers of both the original owner and the co-owner.
If for some reason you have allowed your premium payments (and therefore HPS coverage) to lapse, you will need to reapply for the coverage from the start, including a new health declaration and medical report if requested.
Any cases (errors, overpayment, etc.) where a refund of the premium is made will mean that a deposit is made to the original insured’s ordinary account, even if it was made by a different co-owner family member.
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