Apr 6 2009, 12:14 PM
QUOTE(b00n @ Jan 30 2008, 02:04 PM)
MLTA is not transferable.
Also, it depends on which type of loan you took.
MRTA is calculated upfront and if you included into your loan agreement; try and imagine how the interest amount hyped up over the years.
Back to type of loans. I'll give mine as an example.
I took flexi loan.
Ok first thing first. The insurance coverage is for "what if" situation. It's meant to paid of your mortgage when you're hit by unfortunate incident mainly death or permanent disability whereby you can't work to pay off your mortgage.
On flexi loan, the principal value of the loan fluctuates but definitely getting lower by years. So why would I insure on the initial high amount up front if I know that I'm going to pay it off in 10 years time while I took 30 years loan? Every year, the amount I owed the bank is getting lower....think of the premium as car insurance. I insure only the amount I owe the bank.
In this above case, I would loose out on MRTA as it's not refundable also. So in the case of early settlement than the initial tenor or refinancing, one definitely loose out. Unless one plans not to refinance and just follow the repayment tenor.
Btw, I do not know about this getting back of money. It might be true if one "pre-paid" the amount. As for my case, I don't pre-pay for insurance or includes it in my loan. I renew yearly based on the amount I owe the bank.
What hav u said is just wrong because MRTA they do have the surrender value , its not totally refundable. Depends on which insurance company u taken from. Lets say u insured ur loan amount and took for 30 years insurance of MRTA , and u settle earlier like wat u said in 10 years, the remaining coverage of 20 years they will calculated the premium and refund back to u. But of coz the amount is not like wat we are expected because its call Mortgage reducing term assurance so the premium will depends on how early u settle the loan and calculated accordingly.Also, it depends on which type of loan you took.
MRTA is calculated upfront and if you included into your loan agreement; try and imagine how the interest amount hyped up over the years.
Back to type of loans. I'll give mine as an example.
I took flexi loan.
Ok first thing first. The insurance coverage is for "what if" situation. It's meant to paid of your mortgage when you're hit by unfortunate incident mainly death or permanent disability whereby you can't work to pay off your mortgage.
On flexi loan, the principal value of the loan fluctuates but definitely getting lower by years. So why would I insure on the initial high amount up front if I know that I'm going to pay it off in 10 years time while I took 30 years loan? Every year, the amount I owed the bank is getting lower....think of the premium as car insurance. I insure only the amount I owe the bank.
In this above case, I would loose out on MRTA as it's not refundable also. So in the case of early settlement than the initial tenor or refinancing, one definitely loose out. Unless one plans not to refinance and just follow the repayment tenor.
Btw, I do not know about this getting back of money. It might be true if one "pre-paid" the amount. As for my case, I don't pre-pay for insurance or includes it in my loan. I renew yearly based on the amount I owe the bank.
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