Normal MRTA/MLTA is underwritten on a Group basis hence the lower in premium compared to conventional Term Life Insurance which is underwritten on a individual basis.

This new solution is underwritten on a Group basis while still giving you the benefits of a normal Term Life.

Hence when you compare the cost, it is much more affordable.

When you buy your houses or properties. You can actually use your personal life insurance as replacement of MRTA. Just tell your Banker that you will morgage out your life insurance. In case anything happen to you yourself. The banker to claim the remainder payment on your life insurance. But there are few things you need to remember before you really use this method to save your MRTA premium.

1) Always ensure you have more than 2 life insurance on hand. One for necessary illnesses protection, second one is for add on protection (opt to have).

2) this method is good for short term properties investment. Less than 5 years investment is prefered.

3) Do not use Critical illnesses life policy to replace MRTA, what if you need this money to cure your illnesses.

Recetly I found that there is another way to save your MRTA money but at the same time u invest without affecting insurance protection. How?

Also, was wondering if anyone thought about this, if you have already purchased 2-3 properties, let's say 150k each, and you have MRTA on all of them, then effectively that's like having term insurance value of 300-450k should anything happen to you. If so, why do people buy life insurance on top of that? The premiums for life cover is much more expensive than term too... not sure if one needs to pay for all the product features when all you need is protection.

Personally, if I were to choose between MRTA / MLTA for my property, I choose MLTA.

1) MLTA = gets back whatever I pay at the end of the period

2) The interest (supposedly earn) from the payment, I consider it as premium to buy the insurance protecting the house and me.

3) based on the 100k loan example in TS first post, I would prefer to get 100k coverage no matter which installment year I am in.

4) No doubt, paying rm61 x 12 mth x 30 yrs = rm21,960 which is much higher than MRTA 2k+. But I get back full 21k at the end.

Thanks for the reply. I've heard of some plan recently..

Any idea? Nothing much in google.

This post has been edited by suiteng: Apr 9 2008, 12:28 PM

Could be the plan zarth is talking about...

Anyway, to me; I would never assigned my life or accident insurance to my property.
I would rather have it to be awarded to my beneficiaries and let them decides what to do.
I bought term loan with no cash awarded back to me as I do not see the needs for receiving cash at the end of the term. It's a yearly thingy. And I insure the amount I see fit (forecast on how much to pay down on my mortgage for the year) and not necessary up to the loan value. And I do not intend to insure it over the rest of my tenure. That's my own plan.

Traditional MRTA is no longer marketable when financial education and plans are properly educated to consumers. Thus you see that a lot of finance company is actually leaving that as optional when taking up mortgage loans. Obviously besides taking up mortgage loans from insurance companies.

MRTA is marketable during the early years because:
1. Ppl buy properties for own stay, nowadays ppl tend to buy for investment.
2. Ppl stay in the said property for their whole tenure or majority of the tenure, nowadays ppl tend to flip properties when they see fit and according to lifestyles.
3. Lack of refinance packages and competitions so not many ppl switch loans.

Went to CIMB bank just now, for 70K LA with 11yr tenure:
MRTA is around RM 800
MLTA is around RM 1550

both if not include in the LA it will be slightly (RM 20-50) cheaper. But what i dont understand is that MLTA is said to be payable in monthly/yearly basis (from the previous few replies). Is it advisable if i paid it in lumpsum in the beginning, or i can neg with bank to pay it in installment basis? and if i paid in lumpsum and i manage to settle my loan earlier, will i get discount or more interest?

You may charged interest if pay monthly. This you have to check with the bank. If you settle your loan earlier, you can either surrender the policy and get back the cash value or you can keep it for further usage when you take up another loan for a new house

BTW, never finance the MRTA/MLTA into your loan else you be paying interest for them for the first 3 years.

hi, is your term loan here equivalent to MLTA?

Normally I don't think it's refundable on the premium. You can check with the insurance company you're buying though.
Thus for my case, I do not plan to insure for the full tenure. I paid yearly something like when you buy a car than yearly you insure based on the amount you owe. My plan is when my loan amount goes below RM100k, I might not want to buy MLTA anymore.

Also another word of advise. Never include the premium into your loan as the amount might be lesser, but than again if you are tro compound it into a say a 30 years loan.......
Say 5.7% interest per annum.
MRTA - RM800 premium = RM871.55 interest charged = RM1671.55 total paid.
MRTA - RM1550 premium = RM1688.63 interest charged = RM3283.63 total paid.

yeah....Mortgage Loan Term Assurance which I renew yearly. Might have used the wrong word.

i thought for MLTA once you finished your loan, you can option to withdraw all the premium?
they printout a copy of the full amount paid for the premium included/excluded into the the loan. and the different is around RM20-RM80 only...

What I quoted is based on 30 years.
If based on 11 years like you mentioned, at the interest of 6%...it's RM2137.16 which is still RM587.16 difference.

Calculate using this excel formula PMT(Rate,Nper,Pv,Fv,Type)
Thus yours is PMT(6%/12,11*12,1550) = RM16.07 which is the monthly installment for your MLTA if charged into your financing.
RM16.07*11*12 + RM16.07 = 2137.16

Note:
Rate = interest rate = 6% per annum
Nper = total installment = 12 years
PV = present value = 1550
FV = future value

p/s: ask them how they get their number and you'll know whether or not you talked to the right sales person.

i got all the numbers from a printed sheet. I think they just keyed in the value and wola...
that's the reason why i see the different is only so small...

Finally found a thread relating to MRTA and MLTA.

Im planning to refinance my home because the current bank isnt offering me good rates.

I did ask advices from several mortgage advisors and all of them suggest that i take MLTA due to its good benefits. Is there any con about MLTA other than it is much more expensive than MRTA.?

Thanks for the help

Is this property for investment or for own stay?

Own stay

If own stay then MLTA lor..

jus like to get n opinion here, i jus received n offer letter for housing loan, MRTA included cost RM6695 for 20 yrs, shud i pay dis MRTA separately so s not to b charged more interest, n also do i have n option not to accept MRTA but opt for MLTA since dis property is for own stay n not for investment...thnx in advance

if two person buy one house.

then one ppl got unfortunate. then will the loan no need to pay?

Yes you have the option to not accept the MRTA and opt for MLTA. Do take note that MLTA will be more expensive but then again if you take MLTA you are able to get all your premium back after keeping it for the full term.

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Added on March 18, 2009, 1:44 pmerm.. with no insurance? Who's covered?

This post has been edited by DriedIce: Mar 18 2009, 01:44 PM

Depends on what you buy. If MRTA, then the loan no need to pay. If MLTA, then the money will go to the beneficiary and the beneficiary will decide on what to do with the money.