Do you know that your existing insurance policy or a new insurance policy can be substituted as HPIS to insure against your housing loan when you purchase a HDB flat?
 

HOME PROTECTION INSURANCE SCHEME (HPIS)

What is HPIS?

CPF members who are using their CPF savings to pay the housing loan instalments on their HDB flats have to be insured under HPIS. The scheme helps the insured members and their families pay off their outstanding housing loans in the event of permanent incapacity or premature death.

Purchasing of HPIS generally amounts to between S$5,000 to S$25,000 or more depending on the gender, age and the loan amount.

How can you be insured?

Alternative 1:
Pay a lump sum premium either from your CPF ordinary account or in CASH (if CPF ordinary account has insufficient balance) to purchase the HPIS offered by CPF Board.

Alternative 2:
Purchase a mortgage reducing insurance plan from any Insurance company. You may choose to pay monthly, quarterly, half-yearly, annually or in a single (lump sum) premium.
 
COMPARISON
HPIS under CPF Board HPIS under Insurance Co.
Payment by CPF or cash  Payment by cash only 
No surrender value once the term of the insurance cover expires You may obtain a full or partial surrender value of premiums paid
Though payment for the coverage is in a single lump sum, it is considered as a cheaper form of insurance May opt for other modes of payment (monthly, yearly etc.)
No loan facility against premium paid May loan against the insurance policy if need be

Coverage ceases when you reach Age 60

 Insurance cover may be till age 75 or for a lifetime
Covers only death and total & permanent disability Covers death and total & permanent disability. You may also opt to cover critical illnesses.
Once the flat is sold, the insurance cover is terminated Transferable to next HDB flat (depending on the plan you select)
In the event of death, the housing loan will be paid off   In the event of the insured’s permanent incapacity or premature death, the beneficiary may choose to use the money to:
  1. Redeem the balance HDB loan

  2. Continue to pay HDB instalments on monthly basis

  3. Take care of other matters that are in urgency
 
Purchasing HPIS from Insurance Company is most beneficial to buyers whose CPF ordinary account monies is only enough to pay for *20% or lower of the valuation price of the flat. If HPIS is purchased using the monies in this ordinary account, buyer will have to prepare extra cash to make up for the difference.

eRealty has tie-up with SP Jeffeury Tan and Associates representing AIA to provide free and no-obligation consultation on purchasing of HPIS. To find out more information, please email jeffeury@jeffeury-aia.com or call 3298375 / 17 now!

*As HDB maximum allowable loan is 80% of the valuation price, CPF monies is needed to pay the other 20% of the valuation price so that buyer need not come out extra cash besides the cash difference between the Purchase price and the Valuation price.