Homeowners using CPF to service housing loans to pay less for home protection insurance from July
SINGAPORE — From July, more than 500,000 flat owners who service their housing loans through their Central Provident Fund (CPF) savings will see a reduction in their mortgage-reducing insurance premiums.
While savings will differ between individuals — as determined by outstanding loan amounts, loan repayment period, type of loans, and the CPF member's gender and age — the CPF Board said three in four of the homeowners who qualify will see reductions of 10 per cent or more.
Announcing the premium reduction for the Home Protection Scheme on Tuesday (June 26), the CPF board said it is due to "better than expected investment returns and claims experience".
The Home Protection Scheme is a compulsory insurance scheme for homeowners who pay for their home loans through their CPF savings. It protects them against losing their flats in the event of death, terminal illness or total permanent disability before their loans are paid up.
A 32-year-old man who is servicing a S$200,000 housing loan from the Housing and Development Board (HDB) for 30 years, for example, will pay 15 per cent less for his premium yearly. Instead of S$215, he will pay S$183.20.
The CPF Board on Tuesday noted that premiums of the Home Protection Insurance are regularly reviewed to ensure they remain affordable for CPF members.
The latest premium reduction came six years after the last reduction in 2012 when premiums dropped by an average of 12 per cent.
"This will allow members to continue to enjoy affordable home protection insurance for their HDB flats while maintaining the long-term sustainability of the Home Protection fund," the CPF Board said.
Other than premium adjustments, the Board is also known to give out premium rebates when CPF investment returns perform better than expected.
In the last rebate exercise in 2015, half of close to 950,000 members eligible for the exercise got S$400 or more credited to their CPF Ordinary Accounts.
