Disclaimer (Block 1): This article is for educational purposes only and is intended to assist CEA-registered property agents in understanding regulatory frameworks. It does not constitute financial, tax, or legal advice. LEVR's calculations are indicative only. Always verify rates and eligibility with your bank, HDB, CPF Board, or a licensed financial advisor before advising clients.
What Is the Home Protection Scheme?
The Home Protection Scheme (HPS) is a mortgage-reducing term insurance policy administered by the CPF Board. It ensures that if a CPF member dies, becomes permanently incapacitated, or is diagnosed with a terminal illness, the outstanding HDB loan will be repaid — up to the insured sum — so that the member’s family can retain the flat.
HPS covers the outstanding HDB loan balance. As the loan is repaid over time, the insured sum reduces accordingly. This is why it is described as a mortgage-reducing policy rather than a level-term policy.
Who Must Apply for HPS?
HPS is compulsory for CPF members who use their CPF OA savings to service the monthly instalments on an HDB flat loan — whether taken from HDB directly or from a bank.
This means that virtually all HDB flat owners who have a mortgage are covered under HPS, as nearly all buyers use CPF OA to service their monthly instalments.
HPS does not apply to private residential property buyers. It is exclusively for HDB flat owners.
HPS Coverage for All Owners
Where there are multiple co-owners on an HDB flat, all co-owners who use their CPF OA to service the loan must be insured under HPS. The total HPS coverage across all co-owners must cover 100% of the outstanding loan. The coverage split between co-owners is typically proportional to each person’s CPF contribution to the monthly instalment, but co-owners can adjust this split.
HPS Premiums
HPS premiums are paid from the CPF OA. They are not deducted from cash income. This means the client does not need additional cash to maintain HPS coverage — the premiums are drawn from the same CPF OA balance used to service the loan.
HPS premiums are calculated based on four factors:
- Sum assured: The outstanding loan amount at the time of application
- Loan tenure: Longer tenures mean higher cumulative premiums
- Age of the insured: Older applicants pay higher premiums
- Gender: Females pay lower premiums due to longer actuarial life expectancy
| Factor | Premium Impact | Notes |
|---|---|---|
| Loan amount | Higher loan → higher premium | Premium reduces as loan balance reduces |
| Age at application | Older → higher premium | Age is locked in at initial application |
| Loan tenure | Longer tenure → higher annual premium | More years of coverage required |
| Gender | Female → lower premium than male | Reflects actuarial mortality tables |
How Premiums Are Charged
HPS premiums are charged annually in advance from the CPF OA. The CPF Board deducts the premium at the start of each policy year. If the CPF OA balance is insufficient to pay the annual premium, the member may be required to top up in cash or the coverage may lapse — which would prevent CPF OA from being used for loan servicing until HPS is reinstated.
Agent note: When reviewing affordability with HDB buyer clients, check that the projected CPF OA balance is sufficient to cover both monthly loan instalments and annual HPS premiums over the loan tenure. Clients who are contributing minimally to CPF (due to lower salaries or self-employment) may find their CPF OA balance depleted faster than expected.
What HPS Covers
| Event | HPS Payout |
|---|---|
| Death | Outstanding insured loan balance paid to HDB or bank on behalf of the estate |
| Total permanent incapacity (TPI) | Outstanding insured loan balance paid; TPI is defined as inability to perform any occupation due to physical or mental condition |
| Terminal illness | Outstanding insured loan balance paid upon certification of terminal illness |
HPS does not cover retrenchment, temporary disability, or critical illness. It is not an income replacement policy — it only covers the mortgage balance.
Exemptions from HPS
A CPF member can apply to be exempted from HPS if they have an existing life insurance policy that provides equivalent or greater coverage for their share of the outstanding HDB loan. The exemption application must be submitted to the CPF Board and the alternative policy must meet specific criteria:
- The policy must cover death, total permanent incapacity, and terminal illness
- The sum assured must be at least equal to the member’s insured share of the outstanding HDB loan balance
- The policy must be maintained for at least as long as the HDB loan tenure
- The policy must not be assigned to any other party (e.g., as collateral for another loan)
In practice, many clients who already hold whole life or term life policies with sufficient sum assured can obtain HPS exemption. This may reduce their overall insurance costs if the alternative policy has lower premiums than HPS. However, the CPF Board’s exemption assessment is based on the policy terms at the time of application.
Agent note: Clients who are interested in HPS exemption should consult a licensed financial adviser to review whether their existing policies meet the CPF Board’s exemption criteria. Do not advise clients on whether to apply for exemption — this is insurance advice outside the scope of a CEA agent’s practice.
When HPS Coverage Ends
HPS coverage terminates when any of the following occurs:
- The HDB loan is fully repaid (HPS sum assured drops to zero)
- The member stops using CPF OA to service the HDB loan (e.g., switches to full cash repayment)
- The HDB flat is sold
- The member reaches 65 years of age (HPS coverage extends up to age 65 only)
- The member passes away or a TPI/terminal illness claim is paid out
After age 65, CPF members can continue to use CPF OA to service their HDB loan but HPS coverage lapses. Clients who are close to 65 and still have a significant HDB loan balance outstanding should be aware that they will lose HPS coverage at that age.
HPS When Refinancing to a Bank Loan
When an HDB flat owner refinances from an HDB concessionary loan to a bank loan, HPS coverage continues — provided CPF OA is still being used to service the monthly instalments. The HPS policy is updated to reflect the new lender (the bank) instead of HDB.
However, if the client stops using CPF OA for the bank loan repayments (e.g., switching entirely to cash repayment), HPS coverage will lapse. Some clients who switch to cash repayment are unaware of this implication.
HPS in the Context of Total Ownership Cost
HPS premiums are relatively small in absolute terms — typically a few hundred dollars per year for a standard HDB loan — but they represent an ongoing draw on the CPF OA balance. When modelling HDB affordability for clients, CEA agents should note that HPS premiums compound with the CPF OA draw for monthly loan instalments. Over a 25-year loan tenure, the cumulative HPS premiums can represent a meaningful reduction in the CPF OA balance available at the point of sale.
Use LEVR’s Home Loan Calculator to model total HDB loan repayments and confirm that the client’s projected CPF OA contributions are sufficient to sustain both the monthly instalment and the annual HPS premium over the full loan tenure.
Disclaimer (Block 3): LEVR's calculator outputs are estimates based on inputs provided and current regulatory parameters as known at time of publication. They are not a guarantee of borrowing capacity, stamp duty liability, or CPF eligibility. Regulatory thresholds and rates may change. Always verify with IRAS, your bank, or a licensed financial advisor before making financial decisions.