Last Updated on by Tree of Wealth
The Housing Protection Scheme (HPS) is an insurance scheme under the purview of the CPF Board. Its premiums are deducted from the CPF Ordinary Account (OA), and in exchange, this insurance scheme protects against property foreclosures in the event that the property owners are incapacitated due to total permanent disability (TPD), terminal illness (TI), or death. This is to ensure that in the event that an owner is unable to make payments for their housing, they and their family members will not lose their home during a difficult time.
The Housing Protection Scheme coverage lasts until one of these two conditions is reached: either the housing mortgage is completely paid off, or the property owner turns 65. The former is because once the mortgage is fulfilled and legal ownership of the property is given to the owner, there is no longer any need to have the HPS to cover; there are no more monthly housing payments to be made, after all. In this case, any pro-rated premiums will also be refunded back to the owner’s Ordinary Account.
This article covers the scenarios in which owners may need to adjust their coverage for the Home Protection Scheme.
When should I adjust the coverage?
The coverage is mostly based on two things: the first is the loan itself, and the second is the percentage of the loan you are responsible for (your share cover).
In the first case, if either the loan amount or the loan term (how long it takes to repay the loan) has been increased, then you will need to adjust the coverage upwards so that you will be covered for the entire amount again. This will cause your premiums to increase, as you are responsible for more. In the second case, you will also adjust your coverage if your share coverage on the monthly housing loan has changed – that is, if you have co-owners and there has been a change in the amount of the loan you will be paying.
If you have gotten new co-owners, you will also need to report this to HDB. If you will still be handling 100% of the HPS cover on your own, then your new co-owner will not need to apply for it. However, if you will now be splitting the responsibility on the HPS, they will then need to apply for HPS coverage through the usual processes – either through HDB or the bank when they are filling out their loan paperwork, or via myCPF using SingPass.
Your premiums will be adjusted upwards or downwards based on whether you are receiving increased responsibility or decreased responsibility. This adjustment helps make sure that you are insured for the exact amount you are covered for and that it is enough to pay outstanding housing loans in cases of incapability.
If you are refinancing your loan, you will actually need to go through a renewal process as the loan itself has changed here. Instead of applying for adjustment, the HPS cover will be automatically reduced if your loan amount or repayment term has been reduced. The new mortgagee’s details will be updated automatically as well based on your application.
In any of the above cases, if there is an upwards increase in loan coverage, you will need to submit a new health declaration (and potentially a medical examination). Based on this new declaration, do note that your application for increased coverage may be denied; this, however, does not affect your previous cover, and you can continue your insurance with the previous cover although this leaves you under-insured.
If you have made a partial repayment to your loan (whether through HDB or the bank), your HPS cover will also automatically be adjusted unless you took a bank loan and used cash for the partial repayment. In this latter case, the adjustment of your HPS coverage is not automatic and you will need to log into the CPF portal to apply for a manual adjustment. CPF will then approach the bank to ascertain the new details of your loan.
Once adjusted, unused premiums will be returned to your CPF Ordinary Account and a new HPS cover and certificate will be issued with the new amounts and information listed. As before, premiums are deducted from the CPF Ordinary Account as usual.
How do I adjust HPS coverage? Can I do it online? Who do I need to tell?
Yes! You can absolutely adjust your HPS coverage online if you need to do it manually. Simply log into myCPF, and select ‘Apply for / Adjust HPS cover’ under the Home Protection Scheme (HPS) tab in My Requests.
If you are making full or partial repayments of your HDB loan, your HPS cover will be automatically adjusted and you will not need to specifically inform the CPF Board. If you are making full or partial repayments for your bank loan and have paid out of your CPF savings, your coverage adjustment will also be automatic.
On the other hand, if you are making full or partial repayments of your bank loan and have paid in cash, you will need to go online to submit the adjustment form, upon which the CPF Board will write to the bank to get a confirmation so your HPS cover can be adjusted.
Can I terminate my HPS coverage? I don’t want to be insured under HPS.
You can read more in our article on HPS exemptions, but in summary, the only way you can be exempted from the HPS is if you do not qualify for it, if your loan has been paid off completely, if you are age 65 and older, or if you have existing equivalent insurance policies that will cover your housing repayment in the cases of TPD, TI, and death.
In the latter case, your insurer will be assisting you to submit exemption documentation – you will need to provide them documentation including your loan details, but otherwise do not need to do anything on your own. If exempted within one month of your HPS cover issuance, you will be able to get a full refund of your premium.
Alternatively, you may also terminate your HPS coverage if another co-owner is picking up your share. To do so, you may online under the myCPF link for ‘Terminate my HPS Cover’ in the Home Protection Scheme (HPS) tab. Do note that the total remaining coverage must still be 100% or the termination of your account will not be approved.
If you sell your flat or redeem your loan, your HPS cover will terminate automatically, and there is no need to file for termination. Any unused premiums will always be returned to the homeowner’s Ordinary Account. This applies as well if you have sold your flat and bought a new one – you will need to apply for a new HPS cover for the new flat. It is only if the HPS application for the new flat is denied that you can instead port the remaining coverage for your old flat over to the new property.