Over 540,000 HDB owners to pay less home insurance from July 1

The Home Protection Scheme protects CPF members and their families from the risk of losing their HDB flats in the event of death, terminal illness or total permanent disability before their housing loans are paid up.
PHOTO: The New Paper file

More than 540,000 Housing Board flat owners will, on average, pay 10 per cent less in premiums for a Central Provident Fund (CPF) home insurance scheme from July 1.

The CPF Board said yesterday that it would be reducing premiums for the Home Protection Scheme (HPS) because of "better-than-expected investment returns and claims experience".

The scheme protects CPF members and their families from the risk of losing their HDB flats in the event of death, terminal illness or total permanent disability before their housing loans are paid up.

Last year, $83.8 million was paid out in claims to home owners who were insured under HPS.

The last time a reduction in premiums for the scheme was made was in 2018.

The CPF Board said it conducts periodic reviews to ensure that HPS premiums remain affordable, while maintaining the long-term sustainability of the HPS fund.

The new rates will kick in for members who join the scheme on or after July 1, while existing members will pay the lower prices when they pay their annual premium or adjust their coverage on or after July 1.

For example, a male member aged 36 with a $200,000 housing loan from the HDB for 30 years will pay a reduced annual premium of $209.40 instead of $232.40 - equivalent to a 10 per cent reduction - when he joins the scheme from July 1, said the CPF Board.

"The reduction in insurance premiums will help with my family's housing finances in the long term - a penny saved is a penny earned," said Ms Peggy Lim, 34, a logistics executive who is a first-time flat owner.

CPF members who are using their CPF savings to pay for their housing loans have to be insured under HPS, said the CPF Board.

Those not using CPF savings to pay for their housing loans can also apply for the insurance.

From next month, potential home buyers can use the HPS calculator on the CPF website to estimate their new premiums.

For more information, visit the HPS page on the CPF website or contact the CPF Board, also through the website. 

This article was first published in The Straits Times. Permission required for reproduction.