Oral Answer by Ministry of National Development on Home Protection Scheme (HPS)
Apr 13, 2015
Er Dr Lee Bee Wah: To ask the Minister for National Development
(a) how many HDB flat owners have been allowed to opt out of the Home Protection Scheme (HPS);
(b) whether the Ministry will make it compulsory for flat buyers to sign up for the Home Protection Scheme (HPS);
(c) whether flat owners who are not covered by the HPS are allowed to sign up for HPS if they are still servicing a housing loan; and
(d) whether HDB will make another effort to emphasise the importance of HPS to all flat owners who are still paying for their housing loan.
Answer:
HDB flat owners who use CPF to service their housing loans must take up HPS. They are only allowed to opt out of the HPS if they have taken up a similar mortgage reducing insurance (MRI). 43,610 flat owners have been allowed to opt out of HPS on this basis.
Flat owners who are not using CPF to service their housing loans may have to set aside cash to pay for their HPS premiums, if they do not have enough in their CPF to do so. As their financial circumstances may vary, HPS is currently not compulsory for those who do not use CPF to service their housing loan. Nonetheless, they can sign up for HPS on an opt-in basis, subject to underwriting and health condition at the time of the application. 142,366 such HDB flat owners have done so. We will need to carefully study whether to make it compulsory for all home buyers servicing a loan to take up HPS or similar MRI.
HDB actively encourages all HDB flat owners servicing a housing loan to take up HPS, as it ensures that surviving family members are protected, in the event of the death or incapacitation of the lessee. At the point of flat purchase, HDB will explain to flat buyers the benefits and coverage of HPS. HPS booklets are also distributed to home buyers at HDB. We will continue to work with CPF Board to see how we can further improve coverage and awareness of the importance of HPS to flat owners who are still paying for their housing loan but who may not have HPS coverage.