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Financial MRTA vs MLTA vs Term Plus..., whatever they call it

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DragonReine
post Jun 10 2021, 05:51 PM

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QUOTE(KamisF @ Jun 10 2021, 05:31 PM)
even if we take full coverage (e.g house price 500k, mrta cover 500k) it will be unable to cover loan amount?
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QUOTE(Bellaciao @ Jun 10 2021, 05:37 PM)
From my experience, yea. I asked for the amortisation table to compare.
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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.
DragonReine
post Jun 11 2021, 10:06 AM

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QUOTE(rokai88 @ Jun 11 2021, 12:58 AM)
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?
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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
DragonReine
post Jun 11 2021, 04:18 PM

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QUOTE(Bellaciao @ Jun 11 2021, 03:11 PM)
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.
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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
DragonReine
post Jun 14 2021, 10:38 AM

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QUOTE(Bellaciao @ Jun 14 2021, 09:48 AM)
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.
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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.


DragonReine
post Mar 23 2023, 06:24 PM

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QUOTE(alicelimsl @ Mar 23 2023, 03:22 PM)
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.
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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.
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