Lapse in Insurance Coverage for Home Protection Scheme

26 Mr Gan Thiam Poh asked the Minister for Manpower (a) in the last three years, how many policy holders had their Home Protection Scheme (HPS) cover lapse because of failure to pay the premiums; (b) how many appeal cases were there from family members claiming HPS benefits upon the HPS member's death or cancellation of the insurance shortly before death; (c) whether measures are taken to ensure that HPS members know the consequences of lapsed insurance and, if so, what are these measures; and (d) whether there are plans to make HPS compulsory for HDB homeowners, including those with pre-existing medical conditions.

The Minister of State for Manpower (Mr Sam Tan Chin Siong) (for the Minister for Manpower): Mr Speaker, Sir, the Home Protection Scheme (HPS) is an insurance scheme that protects surviving family members from losing their homes if the insured member meets an untimely death, terminal illness or total permanent disability. In such a situation, HPS will help to defray the outstanding mortgage of the home, hence, enabling surviving family members to continue to live in their flats.

Under the CPF Act, it is mandatory for all HDB flat owners who use their CPF savings to pay for their mortgage instalments to take up HPS. HDB flat owners who do not use their CPF savings to pay for their mortgage can take up HPS on a voluntary basis.

As at December 2016, about 1.5% of HDB flat owners who used CPF savings for their mortgage instalments lapsed on their HPS policy because they failed to pay the insurance premiums. This was lower than the corresponding figure of about 1.6% in 2015 and 1.8% in 2014. So, we see a decreasing trend over the years.

In 2016, CPFB received 19 appeals from family members who requested to make a HPS claim even though the deceased policy holder had lapsed or cancelled his HPS policy. These appeals were considered on a case-by-case basis.

CPF Board and HDB have put in place several measures to help HDB flat owners minimise the risk of lapsing on their HPS coverage.

One, at the point of flat purchase, HDB explains to flat buyers the benefits and coverage of HPS.

Two, subsequently, HPS premiums are automatically deducted from the flat owners' CPF Ordinary Account (OA). Flat owners can also use their co-owners' OA savings to pay for their HPS premiums if they themselves do not have sufficient OA savings.

If members miss their premium payment, CPF Board sends them a notification within one week, reminding them to pay their premium and, if necessary, a second notification after one month, informing the members that HPS claims are not possible if their policy lapses. If premiums are not paid within the two-month grace period, CPF Board sends a letter notifying members that their policy has lapsed and the letter also requests them to re-apply for HPS. For members who are required to take up HPS but their policy has lapsed, CPF Board will continue to send them letters every six months reminding them to re-apply for HPS. So, there is a continuous measure to keep reminding members who had lapsed on HPS to re-apply so that they can enjoy the coverage.

Today, HPS already covers members with mild pre-existing illnesses, such as well-controlled diabetes and hypertension. MOM is reviewing the extension of HPS to those who suffer from serious pre-existing medical conditions. We are also exploring with MND and HDB on how we can further strengthen the continued payment of HPS insurance premium to minimise the number of HPS lapses.