What Is the Home Protection Scheme (HPS)? Coverage, Eligibility and How It Works

Besides their love for acronyms, the government also has a soft spot for schemes. And if you're an HDB flat owner, the Home Protection Scheme (HPS) is one of the many schemes you might be forced to take part in.

In a nutshell, HPS is mortgage-reducing insurance that ensures you and your family won't lose your HDB flat if you die, become terminally ill, or are permanently disabled and can't repay your home loan. Here are the 10 things you need to know.

What HPS actually is

The Home Protection Scheme (HPS) is a mortgage-reducing term insurance scheme that protects HDB flat buyers and owners.

If you work as an insurance agent, you're already nodding along. For everyone else muttering "mortgage... whut...?"—mortgage insurance offers life insurance protection for any sums still owing on your home loan.

You or your family will qualify for a claim if you (or whoever is paying for the HDB flat) die, are diagnosed with a terminal illness, or become totally and permanently disabled. The claim amount is the remaining sum on your home loan.

So if you pass away when you still owe $100,000 on your home loan, HPS pays this in full. Your family doesn't have to worry about losing the flat or taking over loan repayments in your absence.

Private insurers sell mortgage insurance that does the same job — so if you're already covered by HPS, you don't need a separate policy unless you want extra coverage. Compared to private mortgage insurance, HPS is quite cheap.

Who needs it, and who's excluded

HPS is compulsory for any HDB owner using CPF to pay the monthly home loan instalment. (This excludes executive condominiums and privatised HUDC flats.)

If you're buying an HDB flat but not using CPF to pay the home loan, you're still eligible for HPS and can opt in.

You are not eligible for HPS if you buy private property, executive condominiums (ECs), or privatised HUDC flats — but you can buy private mortgage insurance instead. You can compare mortgage insurance plans on MoneySmart's mortgage insurance comparison tool.

You'll be covered by HPS until age 65 or until your housing loan is paid up, whichever is earlier.

Your health declaration determines your eligibility

HPS cover isn't automatic — your eligibility is subject to approval, and you'll need to be in good health.

• You may be required to undergo a medical examination, or CPF may request a copy of your medical report from your attending doctor.
• You must fully and truthfully declare your health condition. Any HPS cover issued based on false or misleading information can be voided at any time — and if that happens, any claim will be denied, with no refund on premiums already paid.
• If you're not eligible for HPS cover due to your health, you can still use your CPF savings to pay your monthly housing instalments—you'll just need to look at private mortgage insurance instead. Compare options on MoneySmart's mortgage insurance tool.

How to apply—it depends on how you're paying

How you apply for HPS depends on your loan type and how you're paying for it:

If you're taking an HDB loan: You apply for HPS at the same time you apply to withdraw your CPF savings for monthly housing instalments through HDB.

If you're taking a bank loan (using CPF savings): You'll need to submit a separate online application to CPF to apply for HPS.

If you're not using CPF savings at all (paying by cash): HPS isn't compulsory for you, but CPF strongly encourages you to apply anyway — you can do this through the same online application.

In all cases, your cover only kicks in once your application is approved and your first premium is deducted — which happens after you've obtained legal ownership of the flat and your loan has been disbursed.

How HPS works with multiple owners

If you're buying a flat with your spouse or family member, you're likely to be co-owners. So how does HPS split between you?

For compulsory HPS, the total coverage of all owners needs to add up to at least 100% of the outstanding home loan (it can be more, but not less). So if you and your spouse pay equal amounts, you can each be covered for 50% of the loan.

For example: you and your partner have an outstanding home loan of $100,000. To meet the minimum requirement, your total HPS coverage needs to add up to $100,000—so yours can be $50,000 and hers $50,000.

You can also opt for a different ratio—e.g. you're covered for $80,000 while she's covered for $20,000—which is useful if you're not splitting the loan down the middle.

Or you can insure both of you for the maximum of 100% each, so the home loan is fully paid off no matter who passes away first. The trade-off: higher premiums.

What determines your premium

HPS premiums are calculated based on:

• Outstanding housing loan on the flat
• Loan repayment period
• Type of loan (HDB concessionary loan or bank loan)
• Your age and gender

A higher loan amount and/or shorter repayment period raises your premiums. The older you are, the higher your premium. Men's premiums also tend to be higher than women's. You can estimate yours using the CPF HPS Premium Calculator.

The good news: you only pay premiums for 90% of your cover period. So if you're covered for 30 years, you'll pay premiums for only 27 years.

Sample premium: Using the CPF HPS calculator, a 32-year-old man seeking coverage for a 25-year home loan of $300,000 will need to pay $219 a year for 22 years.

Paying your premiums through CPF

Your annual premium is deducted automatically from your CPF Ordinary Account (OA).

If your OA doesn't have enough for both your housing loan and HPS premium, the HPS premium takes priority, so your coverage doesn't lapse.

If your OA still can't cover it, CPF will notify you. You can get a co-owner to pay using their OA savings, or pay by cash, eNETS, PayNow, or AXS. It's best not to let your coverage lapse — reapplying for HPS means undergoing medical underwriting again, and you might not qualify depending on your health at the time.

When a claim won't be paid out

HPS claims are not payable if:

• The claim arises from self-inflicted injury or suicide
• The member has committed a criminal offence punishable by death
• The claim arose from the member's own intentional criminal act
• The member provided false or misleading information in their application
• The claim arose from war, warlike operations, or participation in a riot
• The claim is linked to a pre-existing health condition excluded on your HPS certificate

This is a big part of why the health declaration in point 3 matters — an inaccurate declaration can unravel your entire cover at claim time, not just delay it.

Opting out of HPS

You can apply to opt out of HPS if you already have one of these:

• Whole life insurance
• Term life insurance
• Endowment plan
• Life riders (must be attached to a basic policy)
• Mortgage Reducing Term Assurance (MRTA) / Decreasing Term Rider

The policy must cover death, terminal illness, and total permanent disability for any unpaid sums on your home loan, up to the full loan term or age 65, whichever is earlier.

Here's the process—and this has changed recently, so don't rely on older guides that say you can apply yourself directly through CPF:

• Approach your insurer, not CPF. CPF only processes exemption applications submitted through your insurer — you can't apply for exemption directly through your CPF account anymore.
• Your insurer will need your housing loan details (commencement date, balance loan amount, balance term, mortgage rate) — usually found on your loan statement, dated within 6 months of the application.
• You can only apply for exemption after you've obtained legal ownership of the flat and the loan has been disbursed.
• If approved and CPF receives your exemption within one month of your HPS cover being issued, you get a full premium refund into your CPF OA. Otherwise, it's a pro-rated refund once cover ends.

Not sure if your existing coverage is even adequate to qualify for exemption? Compare mortgage insurance plans on MoneySmart to check what's out there before you commit either way.

HPS vs. your other home-related insurance

HPS often gets confused with other coverage HDB owners are required to (or should) have. Here's how they stack up:

The key gap to flag for readers: HDB Fire Insurance does not cover renovations or belongings — only the bare structure HDB handed over. If you've spent $30,000–$100,000 renovating your flat, none of that is covered unless you separately buy home insurance. HPS, meanwhile, doesn't cover any physical damage to your home at all—it only protects against you being unable to repay the loan.

HPS vs. private mortgage insurance

HPS is a form of mortgage insurance, but it differs from private mortgage insurance in a few ways:

• Portability: HPS is not portable. If you sell your HDB flat and buy another home, you can't transfer your cover—you'll need to terminate and reapply, which may affect your premiums.
• Age cap: HPS covers you only until age 65. Private mortgage insurance may have a later or no maximum age—worth noting if you're an older flat owner.
• Payout destination: HPS pays HDB or your bank directly. Mortgage insurance may pay out directly to you or your family, depending on policy terms.
• Customisation: Private mortgage insurance often comes with riders you can add, like premium waivers or critical illness coverage.

HPS is still relatively inexpensive compared to private mortgage insurance, so if you qualify, it's worth keeping—you can always top up with additional private coverage if you want more.

HPS vs. life insurance

You can opt out of HPS if you have life insurance, but the two work differently:

• HPS is pegged to your outstanding home loan—the sum assured decreases as you repay, and ends when the loan's paid off.
• Life insurance protection doesn't decrease as you pay off your loan, which means you could end up under- or over-insured unless you actively adjust your sum assured.
• Life insurance takes more legwork on your part to calculate your protection needs and factor in your home loan repayments.

There's nothing stopping you from having both. In fact, if you're buying an HDB flat and have dependants, you probably should.

What should I do with my HPS?

If HPS is compulsory for you, there's not much to decide. But even if you're eligible to opt out, we'd recommend keeping it anyway.

Private insurance can lapse if you miss premiums during financial difficulty. HPS is automatically paid through CPF, and CPF tends to be more forgiving if you're short—think of it as your safety net.

If you have or plan to buy life insurance, HPS can help you save money: you can opt for a lower sum assured on your life insurance policy since your mortgage is already covered by HPS, which means lower life insurance premiums.

Review your coverage from time to time. You'll need to adjust your HPS if you've:

• Switched to a longer or shorter loan package
• Partially redeemed or paid off your home loan
• Changed your share of repaying the loan

Write in to CPF to adjust your HPS coverage so you're not underinsured—or overpaying.