What is mortgage insurance?

Some of us wonder if MRTA and MLTA mortgage life insurance are the same. Well, the answer is that it is not! Both of these elements have the same concept, which is life insurance, but the characteristics of both are pretty different.

Mortgage Reducing Term Assurance (MRTA) is a type of life insurance that will help to settle all the outstanding balances on your home loan in the event of death or total and permanent disability (TPD). Meanwhile, Mortgage Level Term Assurance (MLTA) is a type of life insurance, but it is a type of repayment of your outstanding home loan as well as there is a guaranteed cash value.

For instance, if you passed away and had purchased an MRTA, the payout goes directly to the bank to settle your outstanding mortgage loan. However, your family will not gain anything from it because, with this type of mortgage, the bank will act as the beneficiary of an MRTA. The bank will help you settle all the outstanding amounts on your property.

Meanwhile, the MLTA mortgage is slightly different from the MRTA mortgage. With MLTA, you can nominate your own beneficiary and not just will the payout settle your home’s outstanding, but your beneficiary will also receive a cash benefit. The best thing about MLTA is that it can be transferred to your new property or refinanced, unlike MRTA, whereby you can’t do it.

What is life insurance?

Life insurance is not the same as a mortgage. In the event of your death during the policy term, life insurance pays your loved ones a sum of money. The premium for life insurance is also determined by the policy value, age, gender, and health. There are two types of insurance under life insurance: Term Life Insurance and Whole Life Insurance. Both serve as insurance and protect your family, but there are distinctions between them. We’ll go over it again below to make sure you understand.

What are the differences between mortgage insurance and life insurance?

Even though mortgages and life insurance may sound similar, they have distinct characteristics.

Mortgage insurance is a type of home loan insurance designed with a reducing sum insured. However, the death benefits will decrease over time to match your mortgage balance, while the premiums will remain constant. Mortgage insurance will also protect your heirs if you die. The payout will be paid to your heirs or lender depending on the type of mortgage insurance you choose: MRTA or MLTA.

Meanwhile, life insurance offers the most cost-effective financial protection for your family. It has a fixed death benefit and premiums. You must purchase a specific plan, pay the premiums, and the payout will be paid directly to your beneficiary after your death. However, there are two types of insurance under life insurance: term life insurance and whole life insurance. Term life insurance and whole life insurance both provide the same death benefit. Still, term life only protects you for a set number of years. In contrast, whole life protects your entire life (coverage that lasts as long as premiums are paid).


So if you in need of MRTA or MLTA, do pm us your date of birth, occupation & contact for an official quote.

Available in both conventional life insurance & hibah takaful.

Alternatively feel free to drop us an enquiry via pm

This post has been edited by ykj: Aug 22 2024, 07:02 PM