Monday, April 16, 2007

Mortgage Protection Policy

What is a mortgage protection policy?

It is a term insurance policy with the sum assured decreasing over the term to match the outstanding housing loan.

If death or permanent disability occurs during the term, the sum insured will usually be sufficient to pay off the outstanding loan. The actual payout is a sum that is stated in the policy.

There may be a small difference with the outstanding loan at the time of claim, e.g. due to change in interest rate or repayment. Any shortfall can be met by other source. Any excess can be retained kept by the claimant.

The premium for this policy can be a single premium or payable over the term, but excluding the last few years.

Some policies are extended to cover critical illness, but the cost is much higher.
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3 comments:

  1. UnknownApril 17, 2007 8:33 AM

    Hi Mr Tan,

    Is this something like HPS that CPF is offering? If I'm dead and have bought both HPS and mortgage protection policy. The HPS would be used to paid for my HDB flat and sum assured for mortgage protection policy would be given to my family members?

    Do advise.

    Thanks and best regards,
    Kim Seng

    ReplyDelete
  2. Tan Kin LianApril 17, 2007 5:33 PM

    If you are insured under the HPS and Mortgage protection policy, your beneficiary will get payment under both policies in the event of a claim.

    After paying off the outstanding loan, the balance can be kept by the family.

    ReplyDelete
  3. AnonymousApril 18, 2007 9:01 AM

    Hi Mr Tan,

    Good morning to you,

    Thanks for the reply.

    Thanks and best regards,
    kim Seng

    ReplyDelete