Basically it is like leasing. U rent the phone for a year, return it for upgrade and continue paying.

If u default, name will be blacklisted at CCRIS.

I guess they won't bother. U still need to pay monthly for a year. If u default, they will blacklist u.

Must buy an insurance coverage plan according to the FAQ.

"The Zerolution premium protection covers all accidental damages, screen cracks, water damage and attended theft. No matter what happens to your phone during the period when you are enrolled in the Zerolution upgrade programme, you will get a new replacement device within 48 hours of making a claim.

You can use the replacement device and return it after the 12th month. This way, you won’t have to worry about your upgrade fee being forfeited even if your phone is damaged."