Let's say I'm buying a RM500k house, instead of buying MRTA/MLTA, would it be better(and cheaper) to just get a term life insurance which assured RM500k(To cover the housing loan)?

while waiting for responses,...
i googled and found this,...

These 3 Insurance Types Will Pay Off Your Home Loan for You!
1) Mortgage Reducing Term Assurance (MRTA)
2) Mortgage Level Term Assurance (MLTA)
3) Term Life insurance

So which plan should you ultimately be going for?
It really would depend on your current financial situation and what you’d like to do with that property.

more details,....
https://loanstreet.com.my/learning-centre/m...-mlta-term-life

https://www.google.com/search?q=term+insura...ih=1211&dpr=0.8

Mortgage policy payout goes to bank first.

Term life policy payout goes to beneficiary first.

This post has been edited by mini orchard: Mar 20 2022, 09:45 PM

It seems like term insurance is better and cheaper too, but I'm sure there are TnC that I'm still not aware off. Waiting for sifu to give their insight.

MRTA / MLTA / TERM / WHOLE life insurance premiums are basically life coverage of the insured. It has nothing to do with the property.

A policy is base on individual requirements and the reasons why there are few types to suit a person.

Affordability and coverage are NOT related. As long it meets insured requirements, is considered 'better and cheaper'.

Cheaper premium goes in tandem with coverage.

For example ...

One can buy any of the 3 types of car insurance with different premium...
1. Third party
2. Third party, fire and theft
3. Comprehensive

Always get banker to apply for reduced interest rate with reduced MRTA. Managed to get the premium reduced from RM11k to 2k with no hike in interest rates. My rationale is that I have lots of assets and life insurance alread - so my family is taken care

Assess your financial position and try not to overinsure. That's what the banks want you to do.

No product is absolutely "better" or "the best" wan lah.
Like many others mentioned, there is only the element of suitability.
Is the product giving you what you need to make it work for you?

One other forumer pointed out a very good point, which is a Term Life pays to your beneficiary.

It is not absolutely necessary for your beneficiary to langsai the hutang in full immediately.
Yes, you may save quite a bit on interest payments, but continuing to pay the loan in installments buys some time.
You may need to discuss with your bank loan officer on the feasibility of this arrangement with your current loan(s).

Having the money paid to your beneficiaries first opens up a bit more options for them in terms of cash flow.
This would be well within their best interests to do so as well.

Thanks for info

MLTA ? MRTA ?

Why not KLTA since you're asking for the "cheapest" and "better".

500,000 coverage
If MLTA cost is RM200
MRTA = RM100
KLTA = RM50

This post has been edited by lifebalance: Mar 23 2022, 04:34 PM

Do i need insurance for property loan ? My brother in law says dunid and he is above around 65 yrs old. It would be expensive for his age group or so i imagine.

Unless you have cash to pay off whatever you owe the bank for the property loan. Otherwise, the other option is insurance.

Still not clear. Do i have the option of taking loan without insurance coverage ?

yes you can.

Do you think you need it?

I usually do a Financial Health Check with my customers, and lay out the facts and figures.

They decide if they need it.

If you buy MRTA/MLTA, Bank will get the money first
If you buy Term, your beneficially will get the money. If bank fails to get money, they will lelong your property. and those who wanna claim it have to pay the balance

Term is much more expensive compared to MRTA/MLTA

you can. but if anythings happen to you, the property will lelong by bank.

Means your beneficially will not get the property back, unless he or she bid it during auction

If owner can take up own risk, there is no need for any insurance. Same for fire, car, medical etc.

The purpose of any insurance is to 'push' the responsibility to the insurer.

As for property, the bank will proceed to auction when borrower cannot repay the loan, albeit a longer process. The good is that the bank can cont to charge interest until the borrowed sum is fully settled

This post has been edited by mini orchard: Mar 23 2022, 06:00 PM