This is part of our "CPF Housing-Related" posts.
In the rare occurrence of a blue moon, some of you may have realised that after reading your CPF account statements, money in your CPF OA is deducted under an entry denominated as 'HPS'. So what is this scheme that is slowly and quietly siphoning cash from your retirement nest for several hidden centuries?!
As defined on CPF website, Home Protection Scheme (HPS) is a "mortgage reducing insurance which insures CPF members and their families against losing their homes should members become physically / mentally incapacitated or pass away before their housing loans are paid up.".
If I could, let me paraphrase this into simpler term. HPS is basically an insurance that has a reducing sum assured feature which can be used to cover the reducing mortgage payments, should you be physically / mentally incapable of doing so, or upon your death. However, this insurance will lapse if your housing loan is paid up or until the age of 65. Similar to all insurance, it is dependent on your health conditions.
In my opinion, this insurance is of utmost importance as it transfer the risks of being unable to pay due to illness or death. Being a direct recipient of this insurance, I am glad to say that my home is protected by this scheme. It allows you to tap on your CPF funds for premium payment, which also means less cash payments from your pockets.
We will be subsequently posting on 3 questions that people have on the HPS. If you have any other questions or feedback on the following topic, do drop us a mail or leave a comment below!
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Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?
Have a feedback? Tell us now!
Subscribe to us or
Follow us: Investment Stab on Facebook
Probably one of the cheapest term insurance policy around?
ReplyDeleteHi Lizardo,
DeletePlease check out the link below and its comment section.
As per commented by our reader/fellow blogger, HPS might not be cheaper than outside private insurers.
http://investmentstab.blogspot.sg/2015/05/3-common-questions-for-cpf-hps.html
Thank you for your comment! :)