The Fundamentals of HDB’s Home Protection Scheme (HPS)

by Laura Lim

What is the HPS?

The HPS is a mortgage-reducing term insurance scheme that protects HDB flat buyers/owners if they pass on and are not able to repay their home loan.

You or your family members will be eligible for a claim if the person who is paying for the HDB flat passes, is diagnosed with a terminal illness, or becomes completely and permanently disabled. The claim amount will be the remaining sum left for your home loan. This ensures that your family will not have to worry about losing the flat or take over loan repayments once you’re gone.

Who can qualify for HPS?

HPS is mandatory for any HDB owner using CPF to pay the monthly home loan instalment however, even if you are not using CPF to pay off your loan, you can still opt for the HPS. The HDB flat types which are protected by this scheme excludes privatised Housing and Urban Development Company (HUDC) flats or executive condominiums. These homeowners can choose to buy private mortgage insurance instead.

How long am I covered under HPS?

The HPS will give you protection up to age 65 or the end of the loan period, whichever is earlier. For those insured under HPS before 1 March 2001, your Single Premium (SP) HPS will cover you up to 55 or 60 years old.

How much is the HPS premium?

The premiums are calculated based on the following factors:

  1. Outstanding housing loan on the flat
  2. Loan repayment period of the flat
  3. Type of loan (HDB concessionary loan or bank loan)
  4. Age and gender of the member

Premiums are typically higher for loans of larger amounts or shorter repayment periods. The premium tends to also be lower for women or younger people and gets higher as you grow older.

You can make use of this HPS Premium Calculator to estimate your HPS premium online. It is good to note that you only need to pay the premiums for 90% of your cover period. For example, if you are covered for 20 years, you will need to pay premiums for only 17 years.

Can I use CPF to pay HPS premiums?

You can use your CPF OA to pay off the annual premium. However, in the case where there are insufficient funds to pay for both the housing loan and HPS premium, the HPS premium will be taken as a priority. If your OA does not have enough to pay the HPS premium, the CPF will notify you. You can either get a co-owner to pay for it with their CPF OA savings or pay by cash/eNETs/PayNow/AXS.

You can request to defer your HPS premium if you have been financially affected by Covid-19. It is advisable not to let your coverage lapse as you will need to go through medical underwriting if you wish to apply again and by then, you might not be eligible anymore due to their health condition.

Can I opt-out of the HPS?

You will only be allowed to opt-out of HPS if you have one of the following types of insurance policies:

  • Whole life insurance
  • Term life insurance
  • Endowment plan
  • Life riders
  • Mortgage Reducing Term Assurance (MRTA) / Decreasing Term Rider

The policy or rider has to cover you if you suffer from death, terminal illness, and total and permanent disability for any unpaid sums on your home loan up to the full term of the loan or when you reach 65 years old, whichever is earlier.

You can apply online via the CPF website to be exempted from HPS if you fit the criteria. If your exemption application is approved by the Board, you will get a full premium refund into your CPF OA within one month from the issuance of the HPS cover. Alternatively, a pro-rated refund will be given to your CPF OA upon the termination of your HPS cover!

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