even if we take full coverage (e.g house price 500k, mrta cover 500k) it will be unable to cover loan amount?

From my experience, yea. I asked for the amortisation table to compare.

Need to check sum assured of the letter offered by insurance provider. If your MRTA is financed by bank (aka its included in the loan, you don't need to pay a single cent of premium when your loan approved) and you intend to get fully covered, then you need go check if the sum assured is the full loan amount INCLUDING the MRTA premium.

If MRTA self pay then no issue, again sum assured must match loan amount.

Otherwise if off then the decreasing sum insured might be off too, which is why run into shortage.

Hello Sifu... Need some advise...

Bought at house at 2.2M... The bank offered an MRTA with 175% loading and TPD declined (due to overweight BMI 37, no health issue, age 35)... Need to pay 150K to start the insurance..

I end up needed to look for an alternative MLTA... reach out to GE insurance agent... asked for MLTA but they do not have it and make an offer for 2M life insurance SmartProtec Sure (till age 70, can't convert after)

premium: 1350/month (no loading yay!)
pay for 30 years
get around 300K at the end (not guaranteed... based on investment performance)

Is this the right path to take... or I should go for MLTA.. my intention is for mortgage protection mainly HOWEVER wouldn't mind a good return at age 70 or the ability to convert to normal life insurance later... FYI I have a separate 200K life insurance only on top of this...

i was reading the thread and there is GROUP VS INDIVIDUAL benefit for MLTA vs life insurance... can someone explain more?

This post has been edited by rokai88: Jun 11 2021, 01:02 AM

If you're confident in meeting the monthly premium payments, term life insurance will be better as there's more flexibility, your beneficiary can use the money however they see fit, and since it covers TPD im assuming based on your post, it'll be more protective than the MRTA.

As for group vs individual, basically if you're on a budget + no dependants who rely on you for income, go for MRTA. If you have dependants, MLTA or term life will offer better protection for them.

This post has been edited by DragonReine: Jun 11 2021, 10:22 AM

Insurance is for protection. If buy and have to exclude certain coverage, is better not to buy and take risk.

Many owners seldom own a property throughout the duration of the loan. When the property is sold, one can cancel the policy and received a small surrender payout. As for the balance, treat it as a cost of ownership like paying loan interest.

My MRTA is financed by bank and the sum insured matches. But when i compare both the schedule provided, really there is a difference tho. In the beginning the sum insured is the same, but over the years, lets say i compare both the 10th year, the sum insured is lesser compared to the loan outstanding.

MRTA is something like fixed assets depreciation calculation with a straight line/ reducing balance rate.

The fixed asset actual value may be higher or lower than the depreciated paper value after few years

That is my understanding.

From my understanding of my own MRTA (full coverage of loan amount for full loan tenure), MRTA sum assured is dependant on the interest rate at point of sale and the sum insured given in the quotation is calculated on a straight line. Housing loan if look at amortization because of base rate changes and other things like additional repayments etc, the loan balance might be "off". During the actual MRTA claim process for full coverage, there should be no issues as the interest rate used to calculate MRTA is usually higher than your home loan interest rate.

however if your coverage isnt full or not up to maximum loan tenure, then base rate changes will affect MRTA claim and may make MRTA claim insufficient to fully settle

It's better if you check with your insurance provider directly on the specific terms of your MRTA if you're concerned about lack of coverage

Hmm, i did ask the banker to extend the MRTA coverage up to the loan tenure tho. My agent say this is known for MRTA but buyers dont notice until when they really need to use the MRTA. Thats why ppl will opt for MLTA or life insurance instead. So end up i chose life insurance with investment linked.

I don't think you will need to cover the entire tenure though, towards the end of the tenure your loan outstanding will be quite less, so it depends on you whether you want to cover full tenure

That depends really on your goal la.

Honestly MRTA is purely to protect dependants from inheriting home with high outstanding loan in case of death and TPD early in the tenure which is why it's cheap. It only covers outstanding loan without cash payout so it's better if your dependants are earning own income, and if you have healthy savings and medical insurance.

MLTA and life insurance is "more" protection because they give cash payout but in long run can be extremely expensive and unless you are capable of affording the constant premium it might not be best choice, since unlike MRTA if you fail to pay premiums you lose coverage. MLTA and life insurance also has tighter restrictions on claims so if your luck is bad your dependants may end up unable to claim. This is a good option if you have many young children + a stay at home spouse, and you don't have healthy savings+investment elsewhere.

usually when it comes to protection, what is ur ultimate goal?
if you have family rely on you financially thn as per what other said MLTA is a better choice for you which some good cash in return
hope this read can help you mrta vs mlta to make a decision

This post has been edited by nohow22: Jun 16 2021, 12:22 PM

Hi all sifu, is MRTA same as life insurance? There is a suicide clause will eligible after 1 year period of life insurance, MRTA can get compensate with this too?

Hi, reading from most of the post here are mentioned that MRTA is the cheapest way to owned a property with limited budget, but why mine is quoted so expensive? can anyone advise?

Covered 500K for 28 years with age of 42, the total premium is near to 50K.

It's mostly your age. At 40+years old the premium gets significantly increased, especially if got other risk factors like health, occupation type etc.

That’s about RM1.78k a year which is RM148/month.

Does this also cover Critical Illness?

It’s probably cheaper compared to ILP because there is no investment element and the coverage will reduce over time.

You can always get your banker to reduce the coverage tenure however that would expose yourself/estate to liability in the event the of CI/Death. Assess your overall finances and decide on the coverage you require.


Best,
Jiansheng

Suspect it is due to your age. Try to cover minimum (get quotation from the banker) if you not too concern on the coverage and tenure.

Is MLTA under name A still workable if A would like to refinance the property and apply together with B?


let's say,
A is currently under a loan with MLTA and he would like to join name to apply a loan together with B for the same property

Hi,

I bought a property with SPA price 750k, and MLTT is offered by the bank at roughly 30k.

I have asked the banker if this is a one-time payment, and the banker confirmed that it is.

From my readings, MLTA/MLTT requires preriodic premium payment, but why is it a one-time payment in this case?