The CPF Home Protection Scheme (HPS) protects CPF members and their families from losing their HDB flat in the event of death, terminal illness or total permanent disability. The HPS is a mortgage-reducing insurance that protects CPF members and their families against losing their HDB flat in the event of death, terminal illness or total permanent disability.
HPS insures CPF members up to age 65 or until the housing loans are paid up, whichever is earlier.
CPF members may use their Ordinary Savings Account to pay for HPS, but if you do not pay your Home Protection Scheme premium, your cover will lapse and you will not be covered under the scheme. You will need to re-apply for cover if you wish to be covered under CPF HPS and your eligibility for coverage will be subject to your health condition at the point of the re-application.
You have to fully disclose all information regarding your health conditions, which include all your past and current illnesses, any past or planned surgery, and any physical or mental impairment. You may also be required to undergo a medical examination. The CPF Board may also request a copy of the medical report on your health condition.
The Home Protection Scheme premium is calculated based on four factors:
- Outstanding housing loan on the flat;
- Loan repayment period of the flat
- Type of loan (concessionary or market rate); and
- Age and gender of member
If CPF members suffer total permanent disability, terminal illnesses or passes away, CPF Board will settle the outstanding housing loan, up to the insured sum, with HDB or the mortgagee directly.
If the member suffers from terminal illness or total permanent disability, or passes away on or after 1 May 2016, with the sum assured higher than the outstanding loan, the excess amount will be paid into the insured member’s Ordinary Account.
For deceased members, their CPF savings will be distributed to their nominees. In cases where no nominations are made, the Public Trustee will distribute the deceased member’s CPF savings under the intestacy laws or Muslim inheritance laws. The member and his joint owners or personal representatives will be informed once the claim payment has been made.
There are however some exclusions for HPS claims. CPF members will not be able to claim under HPS if the following events occur within the first policy year of the cover:
- they committed self-inflicted injury or suicide, or
- they committed a criminal offence punishable by death, or
- the claim arose out of their own intentional criminal act.
CPF members will also not be able to claim under HPS if they were not in good health before the commencement of HPS cover, or
if they provided false or misleading information, or if the claim arose from wars or any warlike operations or participation in any riot.
CPF members will also have to adjust your HPS cover if the loan repayment period or loan amount has changed,or if your share of responsibility in repaying the loan has changed. This is to ensure that you are not over-insured and that your share of HPS cover is sufficient to pay your share of the outstanding loan in the event of death or permanent incapacity.
You can apply for HPS exemption if you already have one or more of the following insurance policies:
- Whole Life
- Term Life
- Life Riders (must be attached to a basic policy)
- Mortgage Reducing Term Assurance (MRTA) / Decreasing Term Rider
These policies must cover your outstanding housing loan up to the full term of loan or 65 years old, whichever is earlier, in the event of death, terminal illness or total permanent disability. Your exemption from HPS may be revoked if any of the insurance policies used for the exemption is discontinued or altered.
Subsequently, the CPF Board would only extend a HPS cover to you based on the declared percentage that you were exempted for, and this is subjected to the Board’s terms and conditions. If you wish to be exempted from HPS again, you will need to reapply for it. CPF members can apply for HPS cover regardless of if they are using HDB loan or bank loan.
By: Phoenix Lee/Contributor iCompareLoan
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