• All blog entries
    • Calculators
    • Case studies
    • Cost of living
    • CPF Are You Ready?
    • CPF Matters
    • Credit Management
    • e-Learning
    • Estate Planning
    • Events
    • Financial advisers
    • High Networth
    • Insurance
    • Investments
    • Letters to the Press
    • Magazines
    • Others
    • Retirement Planning
    • Scams
    • Surveys
    • Tragic Stories
    • Unethical sales process
    • Videos
  • Legal
  • Testimonies
    • Individual testimonies
    • Gallery
  • My Account
Hi, looking for a fee-based financial planner in Singapore? Read this article now!
  • Home
  • About
    • About Wilfred Ling
    • Wilfred Ling from Client to Adviser
    • Why do you run your own professional financial planning practice?
  • FAQs
    • FAQs on Wilfred Ling’s Financial Services
    • FAQs on Financial Planning
    • FAQs on Investments
    • FAQs on Insurance
    • FAQs on Estate Planning
  • Services
    • Overview
    • Retirement Planning
    • Investment Portfolio Management
    • Insurance Planning
  • Fees
  • Cool Tools
  • Contact
  • Subscribe
You are here: Home / Insurance / ST forum: Home Protection Scheme – Start coverage once payment is made

ST forum: Home Protection Scheme – Start coverage once payment is made

15, October 2014 by Wilfred Ling 2 Comments

Previously I wrote about the case in which a lorry driver Jason Lim Wei Kwan drowned when the lorry he was in slid off a barge and sank into the sea off Pasir Panjang Terminal. As I suspect they had applied for a BTO but now having difficulty paying the remaining balance due to the Home Protection Scheme only taking affect after collection of keys, I decided to write to Straits Times. The following letter was published on 8 October 2014:

home protection schemeHome Protection Scheme - Start coverage once payment is made

doublequote-left-blackTHE Home Protection Scheme is a compulsory mortgage insurance scheme for those using their Central Provident Fund savings to pay for the mortgage instalments of their HDB flats.

One of the problems with it is that coverage does not start when one signs the Agreement for Lease for a new HDB flat; it starts only after the collection of keys.

Buyers are already committed to the purchase of the flat by paying a down payment when they sign the Agreement for Lease. However, prior to the collection of keys, should one of the buyers die or suffer from permanent incapacitation, there is no insurance coverage.

Can the authorities consider starting the coverage as soon as the first down payment is made?

Also, would the HDB refund the down payment on compassionate grounds when the purchase is foiled by unfortunate events such as death or permanent incapacitation?

Wilfred Lingdoublequote-right-black

Source: http://www.straitstimes.com/premium/forum-letters/story/home-protection-scheme-start-coverage-once-payment-made-20141008

This was CPF and HDB's reply on 16 October 2014:

Home Protection Scheme: Why cover starts upon collection of keys

doublequote-left-blackWE THANK Mr Wilfred Ling for his feedback ("Home Protection Scheme: Start coverage once payment is made"; Oct 8).

The Home Protection Scheme (HPS) is a mortgage-reducing insurance administered by the Central Provident Fund Board that aims to help CPF members settle their outstanding housing loans for HDB flats in the event of death or permanent incapacity.

HPS cover will commence when a member has become the legal owner of his HDB flat upon collection of the keys, and this is about the same time as the commencement of his housing loan.

At this point, flat buyers would have finalised the housing loan quantum, loan repayment period and share of repayment among the co-owners.

The HPS sum assured and coverage period can then be determined based on these parameters. This helps to ensure that members have the appropriate level of financial protection and do not pay excessive premiums using their CPF savings.

Members looking for earlier financial protection can consider alternative private mortgage or term insurance policies.

A forfeiture of 5 per cent of the price of the flat will apply when new flat buyers cancel their application after signing the Agreement for Lease. This is to deter frivolous applications and to protect the interests of serious buyers.

Nonetheless, the HDB is mindful that there could be situations that merit special consideration.

The HDB will look into the circumstances of each case and consider the best way to help buyers, including waiving the forfeiture for those facing extenuating circumstances.

We will take Mr Ling's feedback into consideration in future reviews of the HPS.

Irene Kang (Ms)
Director of Communications
Central Provident Fund Board

Loh Swee Heng
Director (Sales)
Housing & Development Board doublequote-right-black

 

Source: http://www.straitstimes.com/premium/forum-letters/story/home-protection-scheme-why-cover-starts-upon-collection-keys-20141016

 

Like this article? Subscribe to my newsletter below for more.

Get regular Tips on Financial Planning. Free subscription for 3 years. Covers all aspect of financial planning such as 'How much salary you should have?', 'How to avoid insurance that is not suitable?", 'What are the retirement planning methods?", etc

Share this:

  • Tweet
  • Print

Related

Filed Under: Insurance, Letters to the Press

Comments

  1. Ifa customer says

    29, October 2014 at 8:15 am

    My ifa advise me take up a private mrta although my BTO is completed in 3 years time. I have already started paying for the mrta now.

    Reply
    • xyz says

      29, October 2014 at 6:57 pm

      In this case, your ifa need (to earn $$$) and your need (to have mortgage protection) just nice coincide.

      Once you collect your HDB key, you can cancel your MRTA and rely on HPS, as the HPS premium is much cheaper.

      Unless you want to hang on to the MRTA as spare additional insurance.

      Reply

What do you think? Leave a comment. Cancel reply


WILFRED LING, CFA

WANT TO GET REGULAR TIPS ON FINANCIAL PLANNING?

JOIN with thousands of other subscribers in getting tips on all aspect of financial planning such as "What is the minimum salary required?", "How avoid insurance that is not suitable", etc.


WILFRED LING IN THE NEWS

Click HERE to find out more.


THE KIND OF CLIENTS I AM LOOKING FOR

NEW TO US?

Learn how you can fully benefit from this massive website: HERE

For Registered Users Only (free)

  • iFAST Monthly Investment Update -July 2020 7/7/2020
  • Navigator Newsletter_June 2020 (36 pages) 19/6/2020
  • iFAST Monthly Investment Update -June 2020 (21 pages) 9/6/2020
  • Fortitude Budget – Save, create jobs and be post-pandemic ready 28/5/2020
  • Navigator Newsletter May 2020 (44 pages) 22/5/2020

View All

For Clients Only

  • JPMorgan Guide to Market Q2 2020 15/4/2020
  • JPMorgan Perspective Q2 2020 15/4/2020
  • JPMorgan Guide to Market Q1 2020 5/2/2020
  • JPMorgan Perspective Q1 2020 5/2/2020
  • PPAM Quarterly Market Outlook 1Q2020 (17 pages) 1/2/2020

View All

Top Posts

  • Strange way of how CPF Interest is calculated & retirement planning CPF has a rather strange way of calculating interest. I...
  • CPF: How to Accumulate $1m in your CPF by 57? I read from the CPF’s AREYOUREADY facebook about a man...
  • Vanguard funds in Singapore at just US$ 20,000! Vanguard is the world’s most famous index fund provider...
  • Access Information & Sign Up Page
  • How financial advisers are paid? This article is inspired by this article YOUR PRACTICE-...

Recent comments

  • LittleTiger on Nomination in insurance policies
  • Josephine Pek on Nomination in insurance policies
  • chonghoong lim on Strange way of how CPF Interest is calculated & retirement planning
  • Jeremy Tan on Strange way of how CPF Interest is calculated & retirement planning
  • Janice on CPF Retirement Sum Scheme
  • Duskerdawn on Strange way of how CPF Interest is calculated & retirement planning

To be notified of new blog post, like this facebook page

To be notified of new blog post, like this facebook page

Read articles based on different categories

Investment Login

iFAST Central: Login

iFAST Prestige: Login

Navigator: Login

Chartered Financial Analyst

CFA
5 years milestone in Continuing Education

Chartered Financial Consultant

ChFC

Featured Blogger

IM$avvy
© Copyright 2006-2021 Wilfred Ling. All Rights Reserved hollow-nasty
hollow-nasty
hollow-nasty
hollow-nasty