Benefits of MRTA and MLTA in Malaysia
Benefits of MRTA and MLTA in Malaysia
Protect your properties for your love ones by getting your home loan protection scheme.
MRTA = Mortgage Reducing Term Assurance
MRTA or Mortgage Reducing Term Assurance is designed to provide coverage and protection for borrowers who take up housing loans. It covers the borrowers against Death and Total Permanent Disability (TPD) due to Natural or Accidental causes, on the outstanding housing loan on decreasing sum assured basis. This initially is for an amount equal to his/her outstanding loan, which will be reduced in accordance with the installment payments (according to the Table of Reducing Sum Assured attached to the policy).Why should the borrowers be protected under the Mortgage Reducing Term Assurance?By way of Mortgage Reducing Term Assurance, in the event of the borrowers’ untimely Death or TPD, we:
- Secure the repayment of the housing loan
- Assure that the borrowers’ loved ones are free from indebtedness in having to settle the outstanding mortgage on the house
- Protect their families from eviction guarantee repayment, thereby relieving the Financier (Policy Owner) from having to go through lengthy legal procedures to settle the outstanding loans/taking legal action to foreclose the property.
MLTA = Mortgage Level Term Assurance
MLTA is a slight variation from MRTA or MDTA and offers an alternative for a borrower who is looking for a life insurance which offers protection plus savings and in some policies returns on the premium.
Premium is paid on a monthly, quarterly, half yearly or yearly basis and the policy holder can choose to have a wider coverage other than death and TPD. The amount of the premium will be determined by the usual factors and the scope of additional coverage.
Buying a house is one of life’s achievements, which is a visible legacy for your present and future. However, unexpected events may lead to loss of income or a decreased ability to fulfill loan obligations. An Mortgage Reducing Term Assurance (MRTA) or Mortgage Level Term Assurance (MLTA) safeguard your home for you and your family.
Mortgage Reducing / Level Term Assurance Plan (MRTA/MLTA)
MLTA or MRTA plan will ensure repayment of your outstanding mortgage in the event of Total Permanent Disability (TPD) or loss of life.The Insurance will take care of your loved ones with these affordable protection plans for your home loan. Rest assured that your ongoing loan repayments will not financially “burden” your loved ones.
MRTA
Example:* Loan Amount: RM 300,000.00
* Loan Tenure: 30 years
* Outstanding loan amount (at point of death / TPD): RM250,000.00
*
For the chart above, the coverage of the insurance will reduce annually from RM300,000 to zero at the end of the loan tenure. This mean that if anything happened in this period the insurance company only payout the claim according to that year coverage. Example, for the above cases, when the Insured passed away or TPD at 9th year with a outstanding of RM250K, the insurance company will payout RM250k to the lender/bank and the remaining RM3k if any to the nominee (s) of the Insured (Assumed that the coverage is RM253k that time). Noted: (Different Insurance company will have a different schedule of TPD claim payment).
MLTA
Example:* Loan Amount: RM 300,000.00
* Loan Tenure: 30 years
* Outstanding loan amount (at point of death / TPD): RM250,000.00
*
For the chart above, the coverage of the insurance remain at RM300,000 until end of the loan tenure. This mean that if anything happened in this period a amount of RM300k will payout by the insurance company. For the above cases, when the Insured passed away or TPD at 9th year with a outstanding of RM250K, the insurance company will payout RM250k to the lender/bank and the remaining RM50k to the nominee (s) of the Insured. Noted: (Different Insurance company will have a different schedule of TPD claim payment).
Comparison and Features of MDTA and MLTA
| MLTA | MRTA |
| 1. Transferable
This policy is transferable whenever the borrower buys a new property or refinances his loan with another bank. Example: Transfer this policy, adjust the sum assured to match the new loan, as many times as you need. |
1. Not Transferable
In most cases, new MDTA policy has to be taken up whenever a borrower changes his properties or refinances his loan with another bank Example: 5 yrs later, refinancing at the older age, for same tenure of same loan amount, the MDTA cost is higher. |
| 2. Insurability is Guaranteed
You purchase only once, with the same sum assured, there is no need to prove your health condition again. |
2. Insurability is not Guaranteed
Most of the time every time you finance your property, you have to prove that you are healthy to purchase MDTA. |
| 3. With Savings or Returns (Cash Value)
Premium paid will be accumulated either as savings or savings plus returns. The cash value can be used to reduce or pays off your mortgage. |
3. No Cash Value
It is an expense with zero cash value at end of the mortgage tenure. |
4 Comments on “Benefits of MRTA and MLTA in Malaysia”
Loan amt= RM180
Loan Period = 10 yrs
Age next birthday = 55 yrs.
What will be the difference in premium btwn MRT and MLT ?
Thanks…
hey friend… i think your site is very interisting for me….. your site give me some important information.. thanks a lot!
Amiable fill someone in on and this fill someone in on helped me alot in my college assignement. Gratefulness you on your information.
Keep posting stuff like this i really like it, Good job My friend