if you are a homeowner of a condo in singapore, you must have been annoyed by those cold-phone call, asking you to purchase a mortgage protection plan,
want to know what is mortgage protection plan? read on, (HDB homeowners Home protection scheme, a compulsory mortgage insurance scheme for those using their CPF to pay for the mortgage (http://mycpf.cpf.gov.sg/Members/CPFSchemes/HomeProtectionScheme.htm)
so what is mortgage protection insurance?
you drive to school and fetch your child back from CCA, you been in accident and lost both leg and the ability to work
or 2 word to describe it "you died" and no one in the family is able to pay the mortgage.
mortgage protection insurance will pay off all the mortgage for you
Below is a quick look at some of the special feature on offer by the major insurance providers in Singapore:
NTUC Income: Lump sum single premium payment or regular premium
OCBC: Reducing coverage or fixed coverage
AXA: Decreasing term assurance
Prudential: Standalone and joint ownership plans with coverage of 10 to 35 years
Before you decide
While the mortgage protection insurance may have its merits, don’t rush into getting it yet. Here’s what you should know before you decide to sign that dotted line:
• Prices for mortgage protection insurance can vary widely; there are so many variables to consider that accurate price comparison would be difficult. We suggest that you go for the policy that best meets your need rather than the one that offers the lowest premium.
• Read the fine print – make sure you understand whether your policy adequately covers disabilities. Some policies offer fixed premiums only for the first 5 years. Make sure you understand the payment terms and conditions for the entire duration of the policy.
• An early termination of the policy usually involves costs. So keep an eye out for penalties in case you intend to reduce your debt burden and prepay your mortgage.
• Some insurers insist on a medical examination similar to that required for a life insurance plan.
That said, a mortgage protection plan is definitely a way to safeguard your family from the possibility of losing their home in case of death or disability.