I am a firm believer of having a safety net. It is even more crucial when we are making any life-changing choices.
Buying a home is one of our life-changing moments and we should be adequately prepared for the worst. Buying a home insurance one of the easiest way to prepare ourselves for any unexpected events.
Home Protection Scheme
It is compulsory to have a home protection scheme if you are buying a HDB using your CPF savings.
Home protection scheme/HPS is a mortgage-reducing insurance that protects against loss of your HDB flat in the event of death, terminal illness or total permanent disability.
HPS insures members up to age 65 or until the housing loans are paid up, whichever is earlier.
The good thing (or not so good) is that HDB and CPF have made it compulsory to apply for HPS if you are using CPF fully or partially to buy an HDB flat. You are forced to be insured.
Yeah for safety net!!
HPS does not cover private residential properties such as Executive Condos.
So what if I am a private residential owner? And I like the idea of a safety net?
If you are a private residential owner, you can apply for a mortgage term insurance.
There are few insurance policies that you can take to substitute or complement the insurance. The coverage MUST be equal/more than the existing mortgage loan.
- Term Life
- Whole Life
- Life Riders (must be attached to a basic policy)
- Mortgage Reducing Term Assurance (MRTA) / Decreasing Term Rider
Term life would be the most viable and most affordable insurance that everyone should sign up for.
A term life insurance will cover you till the age of 65.
In the event of death, terminal illness or total permanent disability, there will be a payout to your next-of-kin depending on the coverage you have.
With this insurance, at least you know that your family will not be burdened with any problem – mortgage debt.
For less than $30 a month, you can get a coverage of $400,000.
You can use sites like comparefirst.sg to compare the insurance prices as well.
You can also speak to your trusted insurance consultant with regards to this. If you have any questions, feel free to contact me.