It found that only 6 per cent of 300 private property owners polled ranked death or terminal illness as their top fear when buying a property.
Consequently, six in 10 respondents do not have mortgage insurance.
They reckon death or disability is unlikely to affect them at their relatively young and healthy age.
Thus, many feel such plans would be a waste of money since the premiums would not be refunded if nothing happened.
To address this, OCBC has launched a mortgage insurance plan that allows customers to pay annual premiums, then refunds all the premiums to them at the end of the policy term if no claim is made.
Known as Mortgage Protector Advantage, OCBC is claiming the plan as a first mover's advantage as no competitor's product today has a premium refund feature.
The plan is underwritten by The Overseas Assurance Corporation, a wholly owned subsidiary of Great Eastern Holdings and a member of the OCBC Group.
Through this offering, OCBC hopes to convince home owners they have little to lose in exchange for gaining peace of mind that their mortgage will be taken care of should tragedy befall them.
It estimates the percentage of home-loan customers who do not buy mortgage insurance has remained relatively flat over the years, even though customers have taken out larger loans as a result of rising home prices.
However, the monthly premiums of Mortgage Protector Advantage are higher than those of plain vanilla mortgage insurance which does not offer premium refunds.
This is OCBC's second stab at refundable premium mortgage insurance. Two years ago, it launched a plan that requires the premium to be paid in full at one go. Known as Mortgage Protector Plus, this single-premium product can be too heavy on the pocket.