What is the Home Protection Scheme (HPS)?

The Home Protection Scheme (HPS) is a mortgage-reducing insurance scheme administered by the CPF Board. It is compulsory for CPF members who use their CPF Ordinary Account savings to service their monthly HDB flat instalments, regardless of whether the loan is from HDB or a bank. Members who repay their loan entirely in cash are not required to enrol, though it is strongly encouraged. Members may also apply for an exemption from HPS if they have private insurance coverage that meets CPF Board's criteria.

HPS pays off the outstanding HDB loan if the insured member dies, is diagnosed with a terminal illness, or becomes totally and permanently disabled. This ensures that the member's family does not inherit the mortgage burden and can continue living in the flat.

HPS premiums are paid from the member's CPF Ordinary Account and are generally affordable. The premium amount depends on the insured sum (your outstanding loan balance), your age, and the remaining loan tenure. As HPS is a mortgage-reducing insurance, the insured sum and premiums decrease over time as your loan balance reduces. Notably, you only pay premiums for 90% of your coverage period - for example, on a 30-year loan, you pay premiums for 27 years.

You and your co-owner can each choose the share of the outstanding loan you wish to be insured for, with the combined coverage of all owners required to be at least 100% of the outstanding loan. Insuring for less than your full share is possible but leaves your family exposed to partial liability in the event of a claim.

HPS coverage ceases when the HDB loan is fully repaid or when the insured member turns 65, whichever is earlier. If your loan extends beyond age 65, you should arrange private insurance coverage for the period after HPS ends. If you sell your flat, HPS coverage also ends and any unused premium is refunded to your CPF Ordinary Account.

While HPS provides a solid baseline of mortgage protection, it does not cover partial or temporary disability. Supplementing HPS with a private term life policy can provide more comprehensive protection for your family.

Cashew recommends that all homebuyers have adequate insurance coverage in place and can connect you with insurance specialists to review your overall protection needs.