Are you a homeowner in Singapore? If so, you may have heard of the Home Protection Scheme (HPS), a mortgage-reducing insurance scheme that provides protection for HDB flat owners and their families. The HPS is a critical tool for ensuring that you and your loved ones can maintain ownership of your home in the event of unfortunate circumstances, such as death, terminal illness, or permanent disability.
Understanding the Home Protection Scheme is essential for any HDB flat owner in Singapore. The HPS is a mandatory scheme for all CPF members who own HDB flats, and it is designed to provide peace of mind and financial security to homeowners. In this article, we’ll take a closer look at the HPS, including eligibility and coverage, HPS premiums and payment, mortgage and loan considerations, additional insurance options, special circumstances and exemptions, policy management and responsibilities, and much more. By the end of this article, you’ll have a comprehensive understanding of the HPS and how it can protect you and your family.
Key Takeaways
- The Home Protection Scheme (HPS) is a mortgage-reducing insurance scheme that provides protection for HDB flat owners and their families in Singapore.
- HPS is mandatory for all CPF members who own HDB flats, and it is designed to provide peace of mind and financial security to homeowners.
- Understanding the HPS is essential for any HDB flat owner in Singapore, and this article will provide a comprehensive overview of eligibility and coverage, premiums and payment, mortgage and loan considerations, additional insurance options, special circumstances and exemptions, policy management and responsibilities, and much more.
Understanding the Home Protection Scheme
If you are a homeowner in Singapore, you may have heard of the Home Protection Scheme (HPS). It is a mortgage-reducing insurance that provides coverage to CPF members and their families in the event of death, terminal illness, or total permanent disability before their housing loans are fully paid off.
What Is the Home Protection Scheme?
The HPS is a scheme that is administered by the Central Provident Fund (CPF) Board. It is designed to provide homeowners with peace of mind, knowing that their loved ones will not lose their homes in the event of unforeseen circumstances. The HPS is mandatory for all HDB homeowners who are using their CPF savings to pay for their housing loans. Private property owners can also opt to participate in the scheme voluntarily.
Under the HPS, the insurance coverage is tied to the outstanding housing loan amount. The coverage decreases as the loan amount decreases over time. This means that the insurance payout will be sufficient to pay off the outstanding housing loan amount in the event of death, terminal illness, or total permanent disability.
The Importance of HPS for Homeowners
As a homeowner, the HPS is an important safety net that provides protection for you and your family. In the event of unforeseen circumstances, the insurance payout from the HPS can help to ensure that your loved ones will not lose their home. This can be especially important if you are the sole breadwinner of the family or if you have dependents who rely on you for financial support.
In addition, the HPS is a cost-effective way to provide insurance coverage for your home loan. The premiums for the HPS are affordable and can be paid using your CPF savings. This means that you do not need to set aside additional cash to pay for the insurance premiums.
Eligibility and Coverage
If you’re a homeowner in Singapore, you may be eligible for the Home Protection Scheme (HPS). This mortgage reducing insurance scheme is designed to protect you and your family from losing your home in the event of death, terminal illness or total and permanent disability (TPD) before your housing loans are fully paid up. Here’s what you need to know about HPS eligibility and coverage.
Who Is Eligible for HPS?
To be eligible for HPS, you must meet the following criteria:
- You must be the legal owner of an HDB flat, an executive condominium (EC), or a privatised Housing and Urban Development Company (HUDC) flat.
- You must have completed the loan application with HDB or the approved mortgagee and be legally responsible for the loan.
- You must have made your health declaration, which is accepted for HPS coverage.
- You must have paid the first HPS premium.
What Does HPS Cover?
HPS covers the payment of home loans for you and your family in the event of death, terminal illness, or total and permanent disability (TPD) up to the age of 65. The coverage that an HPS policy provides is straightforward. It ensures that your outstanding housing loan will be paid up to the maximum coverage limit in the event of any of these covered events.
Coverage Limits and Terms
The maximum coverage limit for HPS is the outstanding housing loan up to the age of 65 or the end of the loan period, whichever is earlier. The HPS premium payable is based on the outstanding housing loan amount and the age of the insured member. The premium is payable until the insured member reaches the age of 65 or until the housing loan is fully paid up, whichever is earlier.
HPS Premiums and Payment
If you are a Singaporean who has taken out a home loan using your CPF savings, you are required to take up the Home Protection Scheme (HPS). The HPS is designed to protect you and your family by providing mortgage-reducing insurance in the event of death, terminal illness, or total and permanent disability. In this section, we will look at everything you need to know about HPS premiums and payment.
Calculating Your HPS Premium
The amount of HPS premium you need to pay depends on several factors, such as your age, loan amount, and loan repayment period. To calculate your HPS premium, you can use the HPS Premium Calculator provided by the Central Provident Fund (CPF) Board. The calculator will give you an estimate of your HPS premium based on the information you provide.
Premium Payment Methods
You can pay your HPS premium using your CPF Ordinary Account (OA) savings or cash. If you choose to pay using your CPF OA savings, your premium payments will be deducted automatically from your account every month. If you prefer to pay using cash, you can make your premium payments annually or monthly.
Understanding Premium Refunds
If you decide to terminate your HPS coverage before the end of your loan repayment period, you may be eligible for a premium refund. The amount of the refund will depend on the remaining coverage period and the amount of premium you have paid. If you have paid your premium using your CPF OA savings, the refund will be credited back to your account. If you have paid using cash, the refund will be made to your bank account.
Mortgage and Loan Considerations
If you are a homeowner in Singapore, you will likely have a housing loan or mortgage to pay off. When considering the Home Protection Scheme (HPS), it is important to understand how it affects your mortgage and loan repayments.
Link Between HPS and Your Housing Loan
The HPS is a mortgage-reducing insurance policy that protects you and your family from losing your HDB flat in the event of death, terminal illness, or total and permanent disability. The scheme is designed to cover the outstanding housing loan amount, which means that your family will not be burdened with the responsibility of repaying the loan if something happens to you.
To be eligible for HPS coverage, you must have completed the loan application with HDB or an approved mortgagee and be legally responsible for the loan. You must also have made your health declaration, which is accepted for HPS coverage, and paid the first HPS premium.
Impact on Monthly Housing Instalments
The HPS premium is a small price to pay for the peace of mind that comes with knowing your family will be protected in the event of unforeseen circumstances. However, it is important to note that the premium is not fixed and may increase over time.
The premium is calculated based on the outstanding home loan amount and loan repayment period. As the outstanding home loan amount reduces over time, so does the HPS coverage and premium. This means that the HPS premium will decrease over time, which may result in a lower monthly housing instalment.
Additional Insurance Options
If you are considering additional insurance options to supplement your HPS coverage, you have several options to choose from. In this section, we will discuss two popular options: comparing HPS with other insurance policies and private insurance coverage options.
Comparing HPS with Other Insurance Policies
When it comes to mortgage insurance, there are several types of policies that you can choose from. One popular option is mortgage reducing term assurance (MRTA), which is similar to HPS in that it provides coverage for your outstanding mortgage balance. However, unlike HPS, MRTA is a private insurance policy that you can purchase from insurers, rather than being mandatory for HDB flat owners.
Another option to consider is life riders, which are add-ons to your existing insurance policies that provide additional coverage for death, terminal illness, or total and permanent disability. Life riders can be added to both term life and whole life insurance policies, and can provide additional protection beyond what HPS covers.
Private Insurance Coverage Options
In addition to MRTA and life riders, there are several other private insurance coverage options to consider. One popular option is term life insurance, which provides coverage for a specified period of time and can be used to cover your outstanding mortgage balance. Another option is whole life insurance, which provides coverage for your entire life and can also be used to cover your mortgage balance.
If you are looking for a more affordable option, you may want to consider a decreasing term rider, which provides coverage that decreases over time as your mortgage balance decreases. This can be a good option if you only need coverage for a specific period of time.
When it comes to choosing an insurer and insurance plan, it is important to do your research and compare policies from different insurers to find the best coverage and rates for your needs. Private mortgage insurance (PMI) is another option to consider, which is similar to MRTA but is provided by private insurance companies instead of HDB.
Special Circumstances and Exemptions
If you are a homeowner in Singapore, you are required to apply for the Home Protection Scheme (HPS) if you are using your CPF savings to pay for your HDB flat. However, there are some special circumstances where you may be exempted from applying for HPS.
Exemption from HPS
If you did not use your CPF savings to pay for your HDB flat, you can opt-out of HPS. Additionally, if you have already purchased a private property or have refinanced your HDB flat with a bank loan, you are not required to apply for HPS.
Claims and Payouts for Critical Situations
HPS provides coverage for critical situations such as total permanent disability and critical illnesses. In the event that you are diagnosed with a critical illness, HPS will pay out the insured sum, which is the outstanding housing loan amount at the point of diagnosis or the share of cover, whichever is lower. If you are declared totally and permanently disabled, HPS will pay out the insured sum or the share of cover, whichever is lower.
It is important to note that the share of cover is the percentage of the outstanding housing loan that is covered by HPS. The share of cover is based on the percentage of the flat that you own and the outstanding housing loan amount. For example, if you own 50% of the flat and the outstanding housing loan is $200,000, the share of cover will be $100,000.
To qualify for HPS coverage, you must be the legal owner of the flat and have completed the loan application with HDB or the approved mortgagee. You must also have made your health declaration and paid the first HPS premium.
Policy Management and Responsibilities
As a Home Protection Scheme (HPS) policyholder, it is important to understand your responsibilities and the consequences of not fulfilling them. This section will cover two important aspects of policy management: maintaining good standing with HPS and the consequences of non-disclosure.
Maintaining Good Standing with HPS
To maintain good standing with HPS, you must ensure that your HPS premiums are paid on time. Failure to pay your premiums may result in the policy being terminated, which means that you will lose your HPS coverage. You can check your premium payment status and history through the CPF Board website.
As a co-owner of the property, it is important to ensure that all co-owners are covered by the HPS policy. This includes updating the CPF Board with any changes in co-ownership, such as the addition or removal of co-owners.
Consequences of Non-Disclosure
When applying for HPS, you are required to make a health declaration. It is important to provide accurate and truthful information as any false or misleading information may result in the policy being voided. If you have any pre-existing medical conditions or disabilities, you must declare them in your application.
If you intentionally withhold information or provide false information, you may face legal consequences. The CPF Board may also require you to undergo a medical examination or provide a medical report to verify your health status.
It is also important to note that intentional criminal acts, such as committing fraud or arson, may result in the policy being voided. If you are unsure whether a certain action may affect your HPS coverage, it is best to contact the CPF Board for clarification.
HPS Beyond Age 65
Congratulations! You have reached the age of 65, and you have successfully paid off your mortgage. However, you may wonder what happens to your Home Protection Scheme (HPS) coverage after age 65. In this section, we will explain everything you need to know about HPS beyond age 65.
Continuing HPS Coverage After Age 65
Firstly, it is important to note that your HPS coverage will continue after age 65, provided that you have not fully paid off your mortgage. HPS coverage will continue until your housing loan is fully paid up or until you reach the age of 75, whichever comes first.
However, you should take note that your sum assured will decrease as you age. This means that the amount of coverage you receive will decrease over time. The sum assured is the amount that you are insured for under the HPS. You can check your sum assured amount on your HPS statement.
In addition, you may face a premium shortfall after age 65. This is because the premium payments for HPS increase as you age. The premium payments are the amount that you need to pay to maintain your HPS coverage. You can pay your HPS premiums using your CPF Ordinary Account (OA) savings or cash.
To avoid a premium shortfall, you can consider topping up your CPF OA savings or paying your premiums in cash. You can also choose to reduce your sum assured to lower your premium payments. However, reducing your sum assured means that you will receive less coverage under the HPS.
Understanding HPS for Different Flat Types
If you own an HDB flat or an executive condominium (EC), the Home Protection Scheme (HPS) is mandatory. For other types of properties such as private residential properties, HPS is not applicable, and private insurance is recommended.
HPS for HDB Flats and Executive Condominiums
The HPS is designed to provide protection to HDB flat and EC owners and their families against losing their homes in the event of death or permanent incapacity before their housing loans are paid up. HPS is a mortgage-reducing insurance that insures CPF members and their families. The scheme aims to help CPF members pay off their outstanding housing loans in the event of death, terminal illness, or total permanent disability.
The coverage of HPS is up to the age of 65 or the end of the loan period, whichever is earlier. The premium for HPS is paid by the use of CPF Ordinary Account (OA) savings, and it is calculated based on the outstanding housing loan amount and the age of the insured.
HPS for Privatised HUDC Flats
If you own a privatised Housing and Urban Development Company (HUDC) flat, you are also required to participate in the HPS. The HPS coverage for HUDC flats is up to the age of 65 or the end of the loan period, whichever is earlier. The premium for HPS is paid by the use of CPF Ordinary Account (OA) savings, and it is calculated based on the outstanding housing loan amount and the age of the insured.
Navigating the HPS Application Process
If you are a Singaporean homeowner, you can protect your home and loved ones with the Home Protection Scheme (HPS). The HPS is a mortgage-reducing insurance that covers you and your family in the event of death, terminal illness, or total permanent disability. Here’s what you need to know to apply for HPS.
Steps to Apply for HPS
To apply for HPS, you must first complete your loan application with the Housing and Development Board (HDB) or an approved mortgagee. Once your loan application is approved, you can apply for HPS cover. You can do this in one of two ways:
- Apply online using your SingPass: You can apply for HPS cover online using the CPF website. To do this, you will need your SingPass and your HDB Loan Eligibility (HLE) letter.
- Apply in person at a CPF Service Centre: You can also apply for HPS cover in person at a CPF Service Centre. You will need to bring your HLE letter and your NRIC.
After you have applied for HPS, you will receive an HPS cover letter and a premium notice. You must pay your first HPS premium within 30 days of receiving your premium notice. You can pay your premium using e-Cashier at any AXS station, or by cheque or cash at a CPF Service Centre.
Using the HPS Premium Calculator
Before you apply for HPS, you can use the HPS Premium Calculator to estimate your premium. The premium calculator takes into account your loan amount, loan term, and age to calculate your premium. To use the HPS Premium Calculator, you will need to provide the following information:
- Your loan amount
- Your loan term
- Your age
- Your loan interest rate
Once you have entered this information, the HPS Premium Calculator will estimate your HPS premium. Keep in mind that the premium calculator is only an estimate, and your actual premium may be different.
The HPS cover period is up to the age of 65 or until your housing loan is fully paid, whichever is earlier. Once your HPS cover period ends, you will no longer be covered by HPS. If you have any questions about the HPS application process, you can contact the CPF Board at 1800-227-1188.
Leveraging CPF for HPS
If you are a Singaporean who has purchased an HDB flat, you are eligible for the Home Protection Scheme (HPS). The HPS is a mortgage-reducing insurance scheme that protects you and your loved ones from losing your HDB flat in the event of death, terminal illness, or total permanent disability.
Using Your CPF Ordinary Account for HPS
You can use your CPF Ordinary Account savings to pay for your HPS premiums. This means you do not have to pay for your HPS premiums in cash. Instead, your CPF Ordinary Account savings will be used to pay for your HPS premiums.
To use your CPF Ordinary Account savings for your HPS premiums, you need to ensure that you have sufficient CPF Ordinary Account savings to cover the premiums. You can check your CPF account balance on the CPF website or through the CPF mobile app.
If you do not have sufficient CPF Ordinary Account savings to cover the premiums, you can choose to pay for the premiums in cash. Alternatively, you can choose to reduce your HPS coverage to a level that is affordable for you.
It is important to note that the HPS is mandatory for all Singaporeans who use their CPF savings to pay for their HDB flat. This means that if you are a CPF member and you have used your CPF savings to pay for your HDB flat, you are required to participate in the HPS.
HPS and Legal Considerations
Understanding Your Legal Obligations and Protections
When you take out a housing loan in Singapore, you are required by law to have a mortgage insurance plan in place. The Home Protection Scheme (HPS) is one such plan that is administered by the Central Provident Fund Board (CPFB). It is designed to protect you and your family against the risk of losing your home in the event of death, total and permanent disability, or terminal illness.
It is important to note that HPS does not cover suicide or self-inflicted injury, nor does it cover losses arising from riots or wars. In addition, if you are not the legal owner of the flat, or if you have not completed the loan application with HDB or the approved mortgagee, you may not be eligible for HPS coverage.
However, if you are eligible for HPS coverage, it is important to understand the legal obligations and protections that come with it. For example, HPS is a mortgage reducing insurance that is designed to pay off your outstanding housing loan in the event of death, total and permanent disability, or terminal illness. This means that your family will not be burdened with the responsibility of repaying the loan if something were to happen to you.
In addition, HPS provides legal protection for your home. If you are the legal owner of the flat, HPS coverage ensures that your home will not be repossessed by the bank or financial institution in the event that you are unable to repay the loan due to death, total and permanent disability, or terminal illness.
It is also important to note that HPS coverage is mandatory for HDB flat owners. However, if you own an executive condominium or privatised Housing and Urban Development Company (HUDC) flat, you may consider applying for private insurance instead of HPS.
Frequently Asked Questions
What dazzling benefits does the Home Protection Scheme offer for HDB homeowners?
The Home Protection Scheme (HPS) offers HDB homeowners protection against losing their homes in the event of death, terminal illness, or total and permanent disability. The scheme provides a mortgage-reducing insurance policy that covers the outstanding loan amount, up to the maximum sum assured, so that your loved ones can continue to reside in the HDB flat without having to worry about the financial burden of repaying the home loan.
How can one effortlessly navigate the application process for the CPF Home Protection Scheme?
You can apply for the Home Protection Scheme when you obtain an HDB loan. The application process is simple and can be completed online via the CPF website. You will need to provide your personal details, declare your health status, and undergo a medical examination if required. Once your application is approved, you will receive a letter of acceptance from CPF Board.
In what scenarios can one gleefully claim from the Home Protection Scheme?
You can claim from the Home Protection Scheme in the event of death, terminal illness, or total and permanent disability. If you are diagnosed with a terminal illness, you can claim up to the maximum sum assured, while in the case of death or total and permanent disability, the outstanding loan amount will be paid off by the scheme. The claim amount will be used to reduce the outstanding loan amount, and any remaining amount will be paid to your beneficiaries.
Is enrolling in the Home Protection Scheme a mandatory celebration for all?
Enrolling in the Home Protection Scheme is mandatory for all HDB homeowners who have taken an HDB loan. However, you have the option to opt out of the scheme if you have other insurance policies that provide similar coverage. It is important to note that the scheme only covers HDB flats and not private properties.
Can the joy of the Home Protection Scheme be extended to private property owners?
No, the Home Protection Scheme is only available for HDB flats and not private properties. Private property owners can consider other insurance policies that provide similar coverage.
What are the sparkling steps to take if your Home Protection Scheme application is cheerfully rejected?
If your Home Protection Scheme application is rejected, you can appeal the decision by providing additional medical information or undergoing a medical examination. You can also consider other insurance policies that provide similar coverage. It is important to ensure that you have adequate insurance coverage to protect your loved ones in the event of unforeseen circumstances.
