Commencement of Coverage for Home Protection Scheme

Ms Lee Li Lian asked the Minister for Manpower (a) what is the rationale for commencing Home Protection Scheme (HPS) coverage after the collection of keys to a HDB flat instead of when the lease agreement is signed; and (b) what is the rationale for not making HPS transferable to the next flat that is purchased.

Mr Tan Chuan-Jin: The Home Protection Scheme (HPS) is a mortgage reducing insurance administered by the CPF Board to help insured members and their families settle their outstanding housing loans for HDB flats in the event of death or permanent incapacity of the member.

The HPS cover commences once the housing loan has been disbursed. This is about the same time when the HDB flat buyer collects the keys to his HDB flat and is due to make the balance payment for his flat purchase. At this point, the housing loan quantum, loan repayment period and share of repayment among the co-owners would have been finalised. The flat buyer would be better able to determine the appropriate level of protection in terms of the amount insured and coverage period under HPS and avoid paying excessive HPS premiums.

Flat buyers looking for earlier financial protection can consider alternative private mortgage or term insurance policies.

An insured member who changed his property will have to obtain a new housing loan with a different loan quantum and repayment period for his next flat. He will need a new HPS cover that is determined based on the new loan and the level of financial protection he now needs.