Friday 19 December 2014

Termination of Insurance Coverage

Today received a letter from Central Provident Fund (CPF) Board, informing me that my Home Protection Scheme (HPS) with them has been terminated.  Officially I am debt free now.

Home Protection Scheme (HPS) is a mortgage reducing insurance scheme administered by the CPF Board.  Should the insured member become permanently incapacitated or die prematurely before age 65, the CPF Board will pay the outstanding housing loan based on the amount insured under HPS. 

Housing loan mortgage payment is the number one expense for me every month.  Although I am funding my housing loan payment fully from my CPF, it is definitely good to have one thing less to worry about going forward.  Just imagine what would happen to the housing loan if interest rates would go up to 7% or 5%.

Also, the remaining money in my CPF and whatever future contribution has the safe chance for compounding 2.5% per annum going forward.  And I would very much like to see this interest rate going up!
The Home Protection Scheme (HPS) is a mortgage-reducing insurance scheme to help insured members and their families pay off outstanding housing loans in the event of the insured members' permanent incapacity or premature death before age 65. - See more at: http://www.mom.gov.sg/employment-practices/employment-rights-conditions/cpf/Pages/home-protection-scheme.aspx#sthash.GWpniff4.dpuf
The Home Protection Scheme (HPS) is a mortgage-reducing insurance scheme to help insured members and their families pay off outstanding housing loans in the event of the insured members' permanent incapacity or premature death before age 65. - See more at: http://www.mom.gov.sg/employment-practices/employment-rights-conditions/cpf/Pages/home-protection-scheme.aspx#sthash.GWpniff4.dpuf
The Home Protection Scheme (HPS) is a mortgage-reducing insurance scheme to help insured members and their families pay off outstanding housing loans in the event of the insured members' permanent incapacity or premature death before age 65. - See more at: http://www.mom.gov.sg/employment-practices/employment-rights-conditions/cpf/Pages/home-protection-scheme.aspx#sthash.GWpniff4.dpuf
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6 comments:

  1. jfree19 December 2014 at 04:30

    Hello!!

    Finally a huge burden off your shoulders! Congratulations!!

    Still a long way for me, as im still single now.

    AHHHHHHH the housing price....!!

    cheers,

    jfree

    ReplyDelete
    Replies
    1. Passive Income Farmer19 December 2014 at 06:13

      Hi jfree,

      Thanks. Certainly one big rock off my shoulder.

      Cheers,
      Farmer.

      Delete
  2. la papillion19 December 2014 at 17:09

    Congrats on being debt free :) cmon, don't be selfish, there's a lot of people out there still paying their loans through cpf, so increasing the interest rate for cpf will also raise their loans ;)

    ReplyDelete
    Replies
    1. Passive Income Farmer19 December 2014 at 17:40

      Hi la papillion,

      Just kidding. Government will not increase CPF interest rates. But, what if bank interest rates are more than 2.5%?

      Cheers,
      Farmer.

      Delete
    2. la papillion19 December 2014 at 18:32

      Haha, if that's the case, then the cpf interest will go up too. The last time it happened was a very long time ago, when 12 months deposit is more than 2.5% pa right? Those are extraordinary period.. I'm not sure what it means if the banks are to raise interest above 2.5%. Hopefully we won't be like Russia haha

      Delete
    3. Passive Income Farmer19 December 2014 at 23:32

      Haha, I remember those old days when the interest rates were 10%. But peoples did not have so high leverage then...

      Delete

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