What share of the Home Protection Scheme cover should I apply for?
The share of Home Protection Scheme (HPS) cover of the outstanding housing loan i.e. the HPS insured sum that you need to obtain depends on your share of responsibility to service the monthly housing instalments.
- Paying the monthly housing instalments solely
You should be insured under HPS for 100% of the housing loan.
- Paying the monthly housing instalments with other co-owners
Your share of HPS cover of the outstanding housing loan should at least match the proportion of the monthly housing instalment which is payable with your CPF savings and/or cash. The total share of cover of the outstanding housing loan in your household must add up to at least 100%. However, you and your co-owner(s) can also individually choose to insure a higher share of cover of the outstanding housing loan, up to 100% each. HPS pays benefits based on the share of the cover of the insured in the event of a claim.
It is important to note that a higher share of cover (i.e. higher HPS insured sum) will result in a higher annual premium that will be deducted from your CPF Ordinary Account. Therefore, please consider your need for financial protection and long-term retirement needs when deciding your share of cover.
o Example
Monthly housing instalment = $1,500
You are using $1,000 from your CPF and $200 cash.
Your co-owner is paying $300 from his CPF to service the loan.
Your share of the cover should be at least:
$1,200 / $1,500 x 100% = 80%
You can however, opt for up to 100% share of cover.
Your co-owner's share of the cover should be at least:
$300 / $1,500 x 100% = 20%
Your co-owner can also opt for up to 100% share of cover.
