If you are a homeowner in Singapore, you may be familiar with the Home Protection Scheme (HPS). This mortgage-reducing insurance scheme is designed to protect you and your family from losing your Housing and Development Board (HDB) flat in the event of death, terminal illness, or total permanent disability. The scheme is administered by the Central Provident Fund Board (CPFB) and is available to all Singaporean citizens and permanent residents who have an outstanding HDB housing loan.
Understanding the Home Protection Scheme (HPS) is essential for any HDB homeowner in Singapore. The scheme is designed to provide you with peace of mind, knowing that your loved ones will be taken care of in the event of unforeseen circumstances. The HPS is a mortgage-reducing insurance plan, which means that the insurance payout will be used to reduce your outstanding housing loan in the event of a claim. This ensures that your family will not be burdened with the responsibility of paying off the outstanding loan amount.
Eligibility and enrolment for the Home Protection Scheme (HPS) are relatively straightforward. All Singaporean citizens and permanent residents who have an outstanding HDB housing loan are eligible to apply for the scheme. You can enrol in the HPS either at the point of signing your HDB loan agreement or anytime thereafter. The premiums for the HPS are also affordable, and you can choose to pay them either through your CPF Ordinary Account or cash.
Key Takeaways
- The Home Protection Scheme (HPS) is a mortgage-reducing insurance scheme designed to protect HDB homeowners in Singapore from losing their flats in the event of death, terminal illness, or total permanent disability.
- The HPS is available to all Singaporean citizens and permanent residents who have an outstanding HDB housing loan, and enrolment is relatively straightforward.
- The premiums for the HPS are affordable, and you can choose to pay them either through your CPF Ordinary Account or cash.
Understanding the Home Protection Scheme (HPS)
If you’re a homeowner in Singapore, the Home Protection Scheme (HPS) is a vital aspect of your financial planning. In this section, we’ll explain what HPS is and the key features that make it so important.
What Is HPS?
HPS is a mortgage-reducing insurance scheme that is designed to provide protection to HDB homeowners and their families. It safeguards your HDB flat by helping you to pay off the outstanding housing loan in the event of death, terminal illness or total permanent disability.
Key Features of HPS
Coverage
HPS provides coverage for HDB homeowners who are using CPF savings to service their housing loans. It applies to all HDB flats, excluding Executive Condominiums (ECs) and privatised HUDC flats.
Compulsory
HPS is compulsory for all HDB homeowners who are using CPF savings to service their housing loans. If you’re buying an HDB flat and using CPF savings to pay the monthly home loan instalment, you’re required to be covered under HPS.
Premiums
The premiums for HPS are affordable and can be paid using your CPF Ordinary Account (OA) savings. The amount of premium payable depends on the age of the insured person and the outstanding housing loan amount.
Benefits
Under HPS, your outstanding housing loan will be paid off in full in the event of death, terminal illness or total permanent disability. This means that your loved ones will not have to worry about repaying the loan and can continue to live in the flat.
Flexibility
HPS is a flexible scheme that allows you to choose the coverage period that suits you best. You can opt for coverage up to the age of 65, 70, or 75, depending on your preference and financial situation.
In conclusion, the Home Protection Scheme is a crucial component of your financial planning as a homeowner in Singapore. It provides you and your loved ones with peace of mind, knowing that your HDB flat is protected in the event of unforeseen circumstances.
Eligibility and Enrolment
Who Is Eligible?
If you are an HDB flat owner and using CPF to pay your monthly home loan instalment, you are eligible for the Home Protection Scheme (HPS). However, if you are not using CPF to pay your home loan, you can still opt-in and enjoy the benefits of HPS.
How to Enrol in HPS?
Enrolling in HPS is a straightforward process. You can apply online via the CPF website or submit a hard copy application form to the CPF office. Here are the steps to enrol in HPS:
- Log in to your CPF account using your SingPass.
- Click on the “My Requests” tab and select “Home Protection Scheme”.
- Fill in the required details, including your HDB flat address, loan amount, and co-owner’s details (if any).
- Choose your coverage amount and payment mode.
- Submit your application.
Alternatively, you can download the HPS application form from the CPF website and submit it to the CPF office.
Opt-Out Provisions
While HPS is compulsory for HDB flat owners using CPF to pay their monthly home loan instalment, you can opt-out of the scheme if you meet the following conditions:
- You have fully redeemed your housing loan.
- You have sold your HDB flat.
- You have transferred ownership of your HDB flat to another person.
- You have refinanced your housing loan with a bank or financial institution.
If you meet any of the above conditions, you can opt-out of HPS by submitting an opt-out form to the CPF office. However, we recommend that you carefully consider the benefits of HPS before making a decision.
Enrolling in HPS is an excellent way to protect your loved ones from financial hardship in the event of your untimely demise or permanent disability. With coverage of up to $600,000, HPS provides peace of mind for you and your family.
Premiums and Payment
Calculating Your Premium
When it comes to the HDB Home Protection Scheme (HPS), your premium is calculated based on the outstanding loan amount, your age, and the loan tenure. You can use the HPS Premium Calculator to get an estimate of your premium. The calculator takes into account the loan amount, interest rate, loan tenure, and your age to give you an idea of how much you need to pay.
Payment Methods
There are two ways to pay your HPS premium. The first is to have the premium deducted automatically from your CPF Ordinary Account (OA) annually. This is the default payment method, and you can check and view the deduction from your CPF account online using your Singpass. You can also opt to pay your premium in cash.
Understanding Premium Payments
Premium payments for HPS are made annually, and you only need to pay for 90% of your cover period. For example, if you are covered for 30 years, you will only need to pay premiums for 27 years. The premium is automatically deducted from your CPF OA, and you will receive a Yearly Statement of Account that reflects the deduction.
If you do not have enough savings in your CPF OA to pay the annual premium for HPS, you will need to pay the premium in cash. You can make payment through AXS machines, SAM machines, or at any CPF Service Centre. It is important to note that if you do not pay your premium on time, your HPS cover will be suspended until payment is made.
Overall, the HDB Home Protection Scheme provides peace of mind for HDB owners, protecting them and their families from losing their homes in the event of death, terminal illness, or total and permanent disability. With the HPS Premium Calculator and multiple payment options, it is easy to calculate and pay your premium to ensure that you and your family are protected.
Coverage and Claims
When you purchase an HDB flat in Singapore, you are required to enroll in the Home Protection Scheme (HPS). HPS is a mortgage-reducing insurance that protects you and your loved ones from losing your HDB flat in the event of death, terminal illness, or total permanent disability.
Extent of HPS Coverage
Under HPS, the total coverage of all owners needs to be at least 100% of the outstanding home loan, but it can be more. This means that if you and your spouse pay equal amounts for your HDB flat, you can each be covered for 50% of the loan. The insurance coverage decreases as you pay off your housing loan.
In the event of critical illness, HPS provides coverage up to $46,000. This coverage is meant to help you pay for your housing loan while you recover from your illness.
Filing a Claim
If you need to file a claim under HPS, you must do so within six months of the incident. You will need to provide all the necessary documents, such as medical reports or death certificates, to support your claim.
Once your claim is approved, the insurance payout will be used to pay off your outstanding housing loan. If the payout exceeds the outstanding loan amount, the excess will be paid to you or your beneficiaries.
What Happens to Coverage Upon Death or TPD?
If you pass away or become totally and permanently disabled (TPD), your HPS coverage will continue until the outstanding housing loan is fully paid off. If you are single and have no dependents, your HPS coverage will cease upon your death or TPD.
It is important to note that if you sell your HDB flat, your HPS coverage will cease, and any unused premiums will be refunded to you.
Overall, HPS provides peace of mind to HDB flat owners and their loved ones. By enrolling in HPS, you can ensure that your housing loan is taken care of in the event of death, terminal illness, or total permanent disability.
Comparing HPS with Other Insurance Policies
When it comes to protecting your HDB home, there are several insurance policies available in Singapore. Here, we compare the Home Protection Scheme (HPS) with other insurance policies to help you make an informed decision.
MRTA vs HPS
Mortgage Reducing Term Assurance (MRTA) is a type of insurance that covers the outstanding amount of your home loan in the event of death, terminal illness or total permanent disability. Like HPS, it is a mortgage-reducing insurance, but there are some differences.
Unlike HPS, MRTA is not mandatory for HDB homeowners. Also, MRTA premiums are generally higher than HPS premiums. However, MRTA provides coverage for a wider range of events, including terminal illness and total permanent disability.
Private Mortgage Insurance
Private Mortgage Insurance (PMI) is a type of insurance that protects lenders against losses due to borrower default. It is typically required for homebuyers who make a down payment of less than 20% of the home’s value.
PMI is not the same as HPS, as it does not provide insurance protection for the borrower. Instead, it protects the lender. PMI premiums can be expensive and can add significantly to your monthly mortgage payment.
Term and Whole Life Insurance
Term Life and Whole Life insurance policies are designed to provide insurance protection for you and your family. They are not specifically designed to protect your HDB home, but they can be used to pay off your home loan in the event of death.
Term Life insurance policies provide coverage for a specific period of time, while Whole Life insurance policies provide coverage for your entire life. Both types of policies can include life riders, such as a decreasing term rider, which can be used to pay off your mortgage in the event of death.
While these insurance policies can provide insurance protection for your family, they may not provide the same level of coverage as HPS. Also, premiums for these policies can be higher than HPS premiums.
In conclusion, while there are several insurance policies available to protect your HDB home, HPS is a mandatory and cost-effective option for all CPF members. While other insurance policies may provide additional coverage, they may not be specifically designed to protect your HDB home and can be more expensive.
Frequently Asked Questions
What’s the cost of the Home Protection Scheme in Singapore?
The cost of the Home Protection Scheme (HPS) in Singapore depends on the type of HDB flat you own and the outstanding loan amount. The premiums are calculated based on a percentage of the outstanding loan amount and are paid annually. The premiums for HPS range from $1.50 to $6.50 per $1,000 of the outstanding loan amount.
How can one get in touch with the Home Protection Scheme customer service?
If you have any questions or concerns regarding the Home Protection Scheme, you can contact the Central Provident Fund Board (CPFB) customer service hotline at 1800-227-1188. You can also visit the CPFB website for more information on HPS.
What are the steps to make a payment for the Home Protection Scheme?
To make a payment for the Home Protection Scheme, you can use your CPF Ordinary Account (OA) savings or cash. If you are using your CPF OA savings, the premium will be deducted automatically from your account. If you are paying in cash, you can make the payment at any AXS station or through the CPFB website.
Where can I find a calculator to estimate my Home Protection Scheme premiums?
You can find a calculator to estimate your Home Protection Scheme premiums on the CPFB website. The calculator will ask for information such as your outstanding loan amount, loan tenure, and age to calculate your premiums.
How does the Home Protection Scheme affect my CPF contributions?
The Home Protection Scheme does not affect your CPF contributions. However, if you are using your CPF OA savings to pay for the premiums, the amount used will not be available for other purposes such as housing or education.
What’s the process for filing a claim under the Home Protection Scheme?
To file a claim under the Home Protection Scheme, you or your appointed representative must submit a claim form and supporting documents to the CPFB. The supporting documents may include a death certificate, medical report, or proof of total permanent disability. The CPFB will assess the claim and inform you of the outcome. If the claim is successful, the outstanding loan amount will be paid off and the HDB flat will be transferred to your beneficiaries.