Keeping Home Protection Scheme premiums affordable

We thank Mr Benjamin Png Kehao for his feedback ("Don't penalise potential flat owners with pre-existing illnesses"; Monday).

The Home Protection Scheme (HPS) is a mortgage-reducing insurance that covers HDB flat owners with outstanding housing loans.

The eligibility for HPS is subject to an applicant being in good health. This practice is necessary to ensure that the scheme remains viable and that HPS premiums are kept affordable for all insured members.

Although members with serious pre-existing illnesses are not eligible for HPS, they can still continue to service housing payments with their Central Provident Fund (CPF) savings.

Some examples of serious pre-existing conditions include cancer, liver failure or transplant, diabetes with complications such as retinopathy or nephropathy, and kidney failure.

The list of pre-existing illnesses is not exhaustive and the CPF Board consults a panel of doctors on individual cases. This is because each medical condition is unique, and members' eligibility for HPS is assessed based on severity, prognosis and control of the medical condition, as well as their health risk profile.

Extending HPS to all CPF members with serious pre-existing illnesses would have implications on the affordability of HPS premiums.

There are also significant moral hazard issues, which also apply to other insurance programmes, that need to be addressed for HPS.

These implications need to be carefully studied, and the CPF Board will continue to review how HPS can be further enhanced to better benefit more members.

In the event that flat owners face financial difficulties in servicing their HDB monthly loan instalments, HDB has various financial assistance measures available to assist them.

Irene Kang (Ms)

Group Director of Communications

Central Provident Fund Board

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A version of this article appeared in the print edition of The Straits Times on September 19, 2015, with the headline Keeping Home Protection Scheme premiums affordable. Subscribe