Widow may lose flat as CPF rejects insurance claim – ST 18 May 2002

By Lorna Tan
COMPANIES CORRESPONDENT

IT WAS a dream home that has turned into a nightmare for widowed mother of two, Madam Jenny Koh, in a cruel twist of fate over an insurance policy.

On August 4 last year, 26 year-old Madam Koh's husband died in hospital after his motorcycle slammed into the back of a bus, leaving behind two daughters aged five and 15 months.

Now, the grieving family could lose their HDB flat after the Central Provident Fund (CPF) Board rejected Madam Koh's claim under a Home Protection Scheme (HPS) policy which her husband purchased before his death.

The Ministry of Manpower - parent ministry of the CPF - has ruled that the HPS policy for $185,600, designed to cover such tragedies, was not yet in force even though the first year's annual premiums had been paid.

The reason: Madam Koh's husband, Mr Yee Poh Keen, 25, died just three days before the family was due to take possession of the four-room Hougang resale HDB flat, that is, formal legal ownership.

This was despite Madam Koh's receipt of a letter from the CPF Board in early August, stating that the insurance cover had commenced from Aug 1 last year.

'Now I have difficulty paying because I cannot afford the Hougang flat on my own and still have to raise the two girls,' said a tearful Madam Koh. She fears she will lose the flat.

A clerk working in a machinery importing company, Madam Koh earns $1,200 a month and is now the sole breadwinner for her two daughters.

HPS is a mortgage reducing insurance which protects CPF members against losing their homes should members become disabled or die before their loans are paid.

Her claim was rejected despite payment of insurance premiums of $183.37 and $158.50 from Mr Yee and Madam Koh, respectively, for two policies for the sum insured of $185,600.

'It's not fair to me...The premiums for the HPS and down payment for the flat were already deducted from our CPF before my husband passed away. Furthermore, we received a letter stating that we were covered under HPS from Aug 1 last year.'

Late last year, the CPF said in a letter to Madam Koh: 'Members are insured under HPS from the loan commencement date provided that the member has legally taken up ownership of the flat.'

But if the family had used a private insurer, Mr Yee would have been covered.

Goodwins Law Corp director and solicitor Stanley Jeremiah, who is appealing to the Government on behalf of Madam Koh, said: 'The cover should be effected as soon as the contract is signed and not only on completion.'

CPF has since refunded the HPS premiums Madam Koh and her husband paid.