Mortgage holders worried about loss of income due to unemployment or illness can ameliorate the risk with a new insurance product offered by HSBC, one of only two policies of its kind available in Hong Kong.
HSBC's Mortgage Repayment Protection Plan, which is due to launch this week, offers coverage for residential home loans held with HSBC for both new and existing customers.
Cash benefits under the scheme are capped at HK$35,000 per month, and will be paid out under a scheme that enables policy holders flexibility in allocating the cash at their own discretion. The only alternative mortgage insurance plan is available through Standard Chartered Bank.
Ann Pearce, head of insurance products personal financial services with HSBC, says the insurance scheme can help reduce the debt burden during troubled times.
'Buying a home for most people is the most expensive purchase they will ever make, and it is important that customers protect not only this valuable asset but also their own credit rating,' she says.
'While life-insurance policies will provide cover for outstanding debt upon death, they do not offer financial support should the policy holder suffer from temporary disability, sickness, or job loss.'
Mortgage holders can choose from two basic plans with different levels of coverage.