This post is particularly applicable to new homeowners of condominiums or other types of private properties. This is because when it comes to home insurance, HDB owners are required to purchase the Home Protection Scheme (HPS) that insures CPF members and their families against losing their homes should they become physically or mentally incapacitated or deceased before their housing loans are paid up.
Mortgage protection insurance is a must for homeowners because it is a type of life insurance that helps pay off the outstanding mortgage in case of death or total or partial disability of the primary homeowner. For homes with joint ownership, the joint coverage plans kick in even if one of the co-owners has been affected. These insurance plans offer additional protection to those of us who are constantly anxious about ensuring that our family always has a secure home.
So what should you take note of when shopping for a mortgage protection plan?
- Just like other types of insurance, you should choose a package that meets your needs. Don’t just sign up for the cheapest one.
- You should also understand what you are getting for the premium you paid for. Read the fine print carefully and understand what kinds of disabilities the policy covers. Also understand the pay out terms and conditions for the term of the policy.
- Premature termination of a policy may incur costs. So take note of penalty fees in case you need to reduce your debt burden.
- Insurers may ask you to go for a medical examination before your premium is calculated.
Some insurance companies also offer additional coverage for other conditions. NTUC Income’s mortgage protection plan, for instance, allows you to add a Living Rider that covers certain dread diseases. Under this Rider, you have the option to waive future premiums upon diagnosis of any dread diseases.