Mortgage Loan Insurance

MLTA (Mortgage Level Term Assurance)
is an yearly premium insurance that will provide a level coverage throughout the lifetime of the policy. For example, you've obtained a MLTA 500k for a 500k Mortgage loan. Throughout period if you've made a repayment and lowered your mortgage loan amount to say RM250k, you will still be getting 500k coverage and when you make a new purchase of a property, you may just use the same policy and do some top up if the new loan amount is more than 500k coverage.

MRTA (Mortgage Reducing Term Assurance
is a single premium insurance that will provide a reducing coverage throughout the loan period of the policy. For example, when you borrowed 500k loan and purchased a 500k MRTA, as years goes by, the coverage is reducing.

What's the pros and cons of MRTA vs MLTA?
MRTA
Advantage
- cheaper than MLTA
- an alternative if you are low on budget

Disadvantage
- non transferable meaning you can't put in another property under the same MRTA, also upon death, the full sum is paid to the bank to settle the loan.
- reducing sum assured e.g you coverage of RM500k, 10 years later, the sum coverage is reduced to RM250k so anything happen can claim RM250k and not RM500k
- zero saving value (whatever you paid for that 1 time payment is burned at end of policy term)

MLTA
Advantage
- same sum assured and can upgrade the amount by topping up
- transferable as it's under your name and not the bank, so in the event of death, the payable sum is issued to your next of kin and they can choose to repay the bank slowly and use the fund for investment
- got saving value

Disadvantage
- slightly more expensive than MRTA due to yearly premium (but countered with savings)


For more information, you may WhatsApp or Call 016 332 3290 *Keith Wong*.