Buying a new home is a key milestone in life. Whether it is getting a BTO, resale or private property for home stay or for investment purposes, here is why it is important to get a mortgage term insurance to protect your asset for your family.
By definition, a Mortgage loan is a loan in which the borrower (new homeowner) puts up the title to real estate as collateral for a loan. This can be done by obtaining a housing loan from HDB, or a bank loan to purchase your property.
If the deceased is paying the HDB loan through CPF
- The deceased will be covered under (Home Protection Scheme) HPS if they are using CPF savings to pay for monthly housing loan instalments on the HDB flat.
- HPS is a mortgage reducing term insurance that protects members against losing their HDB flat in the event of death, Terminal illness or Total permanent disability.
- In this scenario, CPF board will settle the outstanding housing loan (up to the insured amount of the reducing sum assured)(Note HPS as a term insurance can only insure members up to age 65 or until the home loan is paid up, whichever is earlier)
If the deceased is taking a bank loan for private property or HDB and do not have any mortgage insurance