The Home Protection Scheme (HPS)
The HPS aims to protect CPF members and their families in case the worst scenario happened. It would provide protection against the possibility of defaulting a mortgage due to factors such as permanent incapacity, terminal illness or death that take place before one could fully pay up the housing loan.
If you are a CPF member and the unfortunate happens to you (touch wood), your dependent would not lose the home due to a possible mortgage issue. This is because HPS will cover the rest of the unpaid installment. You are guaranteed a protection until you reach 65 years of age or until your loan is paid up, whichever is earlier.
Private Mortgage Insurance
Another option to protect your home mortgage is by engaging in a private mortgage insurance. Similar to the HPS, private mortgage Insurance will also cover your outstanding loan in cases where you could not complete payment due to unexpected conditions.
What differentiates the private mortgage to that of the HPS is the availability of riders to complement the basic insurance. For example, you can choose to have riders that can protect you against critical illness.
Last but not least is the premium rate. When it comes to premiums, private mortgage coverages allow you to choose from a variety of premium rates that are competitively offered by the different providers. This is in contrast to the HPS, where a single premium rate is applied.
As a final note, this article attempts to provide only a general comparison. If you are interested in learning more about the details (e.g scheme calculation, exclusion, exemption, claim process, etc.), we encourage you to consult with your most trusted financial professional.
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