Your death could cost your family their home if you are not covered, says JASON ONG
RECENTLY, my client Mr Wong called me for mortgage insurance advice. He had just bought a semi-detached house for close to $2 million. He took a loan of $1.2 million over 15 years, and was looking for a mortgage reducing term insurance that will pay off his mortgage in case of his death or total and permanent disability (TPD) while the loan is not fully paid.
Mr Wong told me that he will never forget the time that he and his younger siblings lost their family home when his father died of a heart attack some 30 years ago, leaving his mother struggling to raise the four of them.
Certainly, he does not want this to happen to his homemaker wife and three children.
‘When I pass away, the last thing that I would want to put my family through is to also lose the roof over their heads,’ he said.
In Singapore, mortgage insurance is not made compulsory for private property owners and those who are not using CPF to pay their monthly HDB housing loan repayments. However, the Home Protection Scheme, or HPS, is mandatory for HDB/HUDC flat owners who service their mortgage loans with CPF funds.
Many private property owners baulk at mortgage insurance either because of inertia or misconception that it’s an unnecessary cost. Without mortgage insurance coverage, however, life could be a lot harder financially for the family if things go wrong. Continue reading