Important for HDB flat owners to take up MRI: Khaw

National Development Minister Khaw Boon Wan has written about the importance for owners of public flats to take up mortgage reducing insurance (MRI).

In his blog post published on Friday, he said such insurance can help pay off the outstanding loan on a flat, should tragedy happen to the breadwinner.

He cited the case of a couple who died suddenly, leaving their only child behind.

The teenager was still schooling and could not keep up with mortgage payments. Her parents had not taken up a mortgage reducing scheme.

In this instance, Mr Khaw said the Housing and Development Board (HDB) made a special exception, deferring the mortgage payments until the girl starts working so that she can focus on school.

He said HDB will be as compassionate as it can to help victims of circumstances address their housing needs when tragedies strike.

However, Mr Khaw said parents should also help their children and plan ahead.

He noted that currently, HDB flat owners using their Central Provident Fund (CPF) to service their housing loans are required to take up the Home Protection Scheme (HPS), or an equivalent MRI scheme.

He said HPS is inexpensive, and there is no cash outlay as payment can be made using CPF, but some HDB flat owners do not subscribe to such insurance.

HPS is administered by the CPF Board.

Under the scheme, should the insured member become permanently incapacitated or die before 65, the CPF Board will pay the outstanding housing loan based on the amount insured.

Mr Khaw noted that HPS premium can be as little as S$13 a month for a 30-year loan of S$250,000.

Source : Channel NewsAsia – 16 Aug 2013

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