25/01/2020
๐๐๐๐ ๐ฏ๐ฌ ๐๐๐๐ - ๐๐ก๐ข๐๐ก ๐๐จ ๐ฒ๐จ๐ฎ ๐ง๐๐๐?
Canโt seem to decide between MRTA & MLTA for the house that you recently bought? Please read on :)
As a homeowner, you must think about the potential risks, i.e what happens to your home and family if something unfortunate happen to you? Who will be paying off your mortgage instalments?
Here are 2 most common options available for Malaysian homeowners plus a third alternative unknown to many:
๐. ๐๐จ๐ซ๐ญ๐ ๐๐ ๐ ๐๐๐๐ฎ๐๐ข๐ง๐ ๐๐๐ซ๐ฆ ๐๐ฌ๐ฌ๐ฎ๐ซ๐๐ง๐๐ (๐๐๐๐)
MRTA is a life insurance plan with decreasing sum assured over time, and it used just to cover your home loan owed to bank. This plan is usually offered by the bank you are getting the mortgage from, as it is used as protection for the bank in case of misfortunes that stop you from servicing the loan.
๐๐ก๐๐ญ ๐๐ซ๐ ๐ญ๐ก๐ ๐๐จ๐ง๐ฌ?
The MRTAโs biggest downside is that the loan settlement directly goes to the bank. Your family will have no control over it. Your house can remain frozen even if the loan is settled. This is until all your income tax, legal and accounting expenses are paid. Your family will not be completely protected from the financial burden in your absence, since they will receive no cash value from the policy.
๐. ๐๐จ๐ซ๐ญ๐ ๐๐ ๐ ๐๐๐ฏ๐๐ฅ ๐๐๐ซ๐ฆ ๐๐ฌ๐ฌ๐ฎ๐ซ๐๐ง๐๐ (๐๐๐๐)
MLTA is a slight variation from MRTA 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.
An MLTAโs sum assured remains constant throughout the policyโs tenure period. The most important thing is that the insurance proceeds are credit-proof and will not be frozen. You and your dependents are financially protected when you are no longer around, or have lost the ability to generate income.
๐๐ก๐๐ญ ๐๐ซ๐ ๐ญ๐ก๐ ๐๐จ๐ง๐ฌ?
The extra facilities of MLTA come at a price of higher premium which can be paid periodically over the tenure of the mortgage, on a monthly, quarterly or yearly basis.
๐. ๐๐ก๐๐ญ ๐ข๐ฌ ๐ญ๐ก๐ ๐ญ๐ก๐ข๐ซ๐ ๐๐ฅ๐ญ๐๐ซ๐ง๐๐ญ๐ข๐ฏ๐? ๐๐ญโ๐ฌ ๐๐๐ซ๐ฆ ๐๐ข๐๐ ๐ข๐ง๐ฌ๐ฎ๐ซ๐๐ง๐๐
If you would like to get a fusion of both options at a lower premium rate, then Term Life insurance is the answer.
It is the oldest and most common life insurance which offers your family (beneficiary) a lump sum payment (sum assured) in event of your death or TPD during your policy tenure (similar to MLTA).
If you are looking for an affordable and more flexible option, with a transparent premium and coverage value, then the Term Life insurance is for you.
Credits to https://www.iproperty.com.my/ and https://www.imoney.my/