Say if the buyer finish up the loan payment within 10yrs / 30yrs loan and the MRTA previously applied covers for 30yrs , can he/she ask for partial refund of the premium?

Depends on the MRTA. Most of them, yes but my mom's 15years+ loan MRTA no refund. And due to lack of supporting documents, I'm unable to fight for a partial refund.

10years/30years, NORMALLY you can get around 60%-70% refund. Based on latest calculation.

what if I sell the property say after a few years? am i entitled for a refund on the MRTA ?

Traditional MRTA/MLTA offered by Banks.

1. Close to Zero refund or after a big fuss they might pro-rate it.
2. Non-transferable. No choice but to stop and buy new one.
3. Payout of sum assured to the banks first.

New MRTA/MLTA offered by AIA.

1. Guaranteed Cash Refund - Eg. MLTA refunds back 95% on a 15/30 years early settlement.
2. Transferable. Choice to continue the coverage until end of term.
3. Sum assured paid to beneficiaries first.

PM me should you wish to know more.

Thanks. Best regards.

Traditional MRTA normally you still can get refund as long as the loan is terminated either by selling off, full settlement by cash or EPF or refinancing. That's the basic MRTA, if they say no surrender value then ask for any supporting documents regarding the MRTA. The bank is not being honest.

there should be surrender value too for MRTA, but the longer the term goes on, the lesser the surrender value is.

However, MLTA has a very high surrender value, and for 30 yr period, sometimes even got profit from there surrender value less the actual payment.

MLTA is transferable to other proporty as we will acquire bigger property when we grow financially in future, MLTA has this good advantage.
What is more, MLTA sum assured is paid to our beneficiary, not to the bank. Therefore we can decide how to use the payment, if goes to bank, we aint' gonna touch the money at all.

I have a few MLTA products here if anyone of you guys wish to know more, please contact me, i am just a click away right. =)

Dear all, what about MRTA ROP (refund of premium), how does it differ from conventional MRTA? What is the pro & con of it? Thank you

surprisingly hongleong call up to refund the premium OR can transfer as personal insurance.

How many % refund of settlement for 10yrs / 30yrs?

probably around 70-75% for <5yrs settlement. still waiting for the cheque.

What a coincidence mine is also from HLA, I just checked with them, I can get back 67% on 5yr/25yr early settlement

hi all, tx for the great advise on the refund of mrta. i shall ask from scbb since i jst sold one unit of property and see how they answer me.

i was confuse by some blogger saying MRTA is transferable..

now i know it's the NEW MRTA.

MRTA always burn once the the loans clear

yes n no.

Do you think it's a good idea to pay thousands of your money first and wait refund when you early settle your loan? Some more if you integrate the MRTA into your home loan, it will being charge interest... Instead of MRTA, why not getting a MLTA? Just pay hundreds of premium annually then you have thousands in hand for other investment. Even put them into FD can earn you interest of 2.5%p.a...

MRTA - yes pay interest for insurance..

Yes, if you paid lump sump up front. Usually there is cash value within the tenure. Anyway, you can check from the policy.

I do a calculation of RM12.5k MRTA cost financed into loan

this amount is equal to aged 28 - 30 years into 330k loan...

My interest alone will be RM9.5k+ (base on 4.2 interest)

Plus both is going to be RM22k divide by 360 months = RM61+

Why not I just add on some for MLTA since it is just another life policy. If you are still young and do not have insurance, this is a good one to go. If you already have 1, it is likely we won't end with only 1 policy.

With my case, I do consider MLTA is a better option but due to financial constrain, I opt to be covered in both ways. A little in MRTA for fewer years... but and the rest amount in MLTA for as long as I am still paying.

To add on, what if BLR goes higher and your interest will for sure increase, either way MLTA you won't lose out cause you can get back the money however do not strain yourself too much if you can't afford the monthly high premium too. A step at a time.

This post has been edited by davidlow7: Jun 5 2012, 09:20 AM

At times, the monthly commitment of MLTA can kill

Hmm, why get MRTA+MLTA? A MLTA should be good enough right?

It depends on the features of the MLTA.

Might to share more here? TQ

Sometimes you need to get some MRTA to actually fight for lower BLR too....

Hmm, example, those MLTA with return, the premium for it is usually higher than those without return. Usually i will focus on the coverage rather than the return. Hence a male age 30 non smoker, can get approximate 390k level death/tpd coverage for only RM 125 per month.

Oh.. now i get it. To get higher loan amount and better loan offer

This post has been edited by MaxWealth: Jun 5 2012, 08:44 PM

Actually if we get coverage without return....

what are the really benefit compare to MRTA as it has higher premium

I can only think of the cover can transfer to other property loan in future but other than that with rm125... it seems a bit hard for us to put in more without getting any much return which is same as MRTA... not focus on return but rather coverage only

This post has been edited by davidlow7: Jun 5 2012, 09:27 PM

age 30 non-smoker, 390K loan, ?Loan Tenure ? = RM125 per month
RM125 per month x ?Loan Tenure? x 12 = ?Final Amount?

What was the Loan Tenure?

+1
Any further elaboration?

Hi,

Let me share my idea and what came into my mind actually base on my current condition.
However I am not an expert and if you have any idea... let's contribute and share..

MRTA
I am quoted around RM12719 for 30 years ... loan amount of RM333k+

Finance into loan (assuming -BLR 2.4 = 4.2)

Interest @ RM9762.31
Premium @ RM 12719
TOTAL = RM 22391.31

Monthly payment = RM62.20 /mth (30 years)

Assuming without interest = RM 35.33 (This is to actually use to calculate the premium difference between MRTA vs MLTA with same coverage)

As you know MRTA is something you shall not expect any returns and MLTA is a long term plan that not only cover yourself but also to give you some savings/returns for a better financial planning such as early house loan settlement etc.

Put coverage aside as they are both same, so the selling points of MLTA should be focus on savings/return.

If MLTA does not focus on your returns, what is the point of throwing an extra RM 62.8 (RM 125 MLTA as quoted above - RM 62.2).

If you put it without interest calculation the difference of the premium is RM 89.67 (RM125 - RM35.33) (so we now have an idea how much extra MLTA costs us over MRTA in actual)

It is important to find out if the extra RM62.8 or RM 89.67 does justify for us to go for MLTA. Definitely tax relief in this MLTA will not justify for the extra we paid in premium.

The cash value base on projected returns (although not guaranteed) remains an important thing as insurance charges when you are old keep increasing and will you need to top up in future in order to keep the policy alive?

The current RM125 does cover 36CI? If yes, how about the cash value as it will not look good as insurance charges increase? Definitely you will not want to be asked to pay for a higher premium if you want to continue being covered when you are old. That's my point of understanding the whole proposal and planning something ahead as insurance is all about financial planning too.

The reason pops out in my mind with my current idea of mixing both MRTA and MLTA in my newly purchased home since I am on very tight budget.
MRTA to cover partial amount of the house and the remaining cover with MLTA since in my life I won't be ending with 1 life policy anyway yet it can be considered as a saving to actually help me in later years plus some minor tax relief.

If God willing, I have some better increment this year I will surely add more.

Basically, I just need to be justified of the extra premium I am paying for the same coverage. The MLTA is transferable still does not justify in the above calculation.

However the above idea and calculations are purely base on my current situation and it may not suit you. However inputs are really appreciated.

Cheers

This post has been edited by davidlow7: Jun 6 2012, 12:09 AM

Sorry, davidlow7, I didn't state it clearly ...
For the above, I actually wanted to ask insurance agent for the elaboration of ...

"Actually if we get coverage without return....
what are the really benefit compare to MRTA as it has higher premium"

I agreed with your statement.
So, I would like to know, what are they think in this case should we buy MLTA (other than MRTA), I wish to know in very details Why MLTA (to see perhaps I missed out something from what I've known about MLTA)

True.

Uhh perhaps if we are able to get any insurance advisor around here to enlighten us on this?

Yeah ...

Not to offense anyone ...
Personally, for them I met they simply proposed MLTA (some even hard selling) without any solid reason.
I wonder if someone here can really provide precise advices to answer probably multiple Why. TQ.

Hi, here is my humble opinion on MLTA or MRTA. It might be wrong and please correct me if so.

1st of all, the difference of MRTA vs MLTA is the trend of the coverage.

For MRTA, the coverage reduces with time.
Usually, there is a reducing rate for the coverage and the coverage term. It is important for us to ensure the coverage term to be as per our loan tenure and the reducing rate to be slightly slower than the BLR-X%. So that the coverage provided is always equal or slightly higher than the outstanding loan.
When BLR increases too much, we should review our montly installment as well as MRTA coverage so that we can settle our loan within the loan tenure and without paying extra interest. This can ensure our coverage is adequote to cover outstanding loan.
**Friendly reminder: BLR increase will increase the total cost of the loan (more interest paid) as well as the MRTA cost (if we finance into the loan)

For MLTA, the coverage remains level with time.

Hence, for sure, MRTA has lower cost of insurance. If budget is tight, MRTA is the best solution. You can consider MRTA from insurance company (reducing term) but i am not sure whether the cost is lesser than MRTA from bank or not. Or you can pay one lump sum.

If you finance into loan, the cost should be RM62.20 /mth assuming BLR remains at 6.6%
If you pay one lump sum, then the cost should be RM 35.33 /month

However, the cost above is for RM 333k coverage only.

So, let's not put coverage aside as the amount of premium you paid ensure a level coverage compared to reducing coverage.

The excess coverage could cover for
1) Excecution fees, legal fees or stamp duty for property transfering
2) family income replacement if insured is not having a lot of personal insurance (example, for critical illness claim for personal life insurance, insured or family member might exhausted the insurance money and left no fund to replace the income if the insured deceased)

I am very sorry because i am too tired. I am not sure i reply accordingly or not.

Anyway here are the benefits of MLTA compared to MRTA ( that might justify is the extra money paid worthy)
(1) level coverage as mentioned above

(2) transferable to next property.

What is so good about can transfer to next property?
a) When we go older, it is hard for us to subscribe for insurance due to health issue. Majority of people having acid uric, high blood pressure, high cholesterol etc. Hence, it is not easy to be covered by insurance. Furtheremore, you might be buying RM 300k property now. In the future, when you are buying RM 1mil property, the underwritting process is even strict.
b) Now you can buy RM 390k death/tpd coverage with RM 125 per month. 15 years later assuming you want to get RM 390k , you need to pay RM 275 per month.

(3) you can add in 36 CI coverage. Most mrta doesnt add in 36 CI coverage

(4) potential return. However, it is non guarateed. Some company projected it at 6-7%, some at 9%. Hence, i seldom mentioned about the return. If i have extra fund, I rather pump extra fund into loan account to save the interest. What i mean is, there are 390k MLTA with RM 125 per month, and there are also 390k MLTA with RM 250 per month. Of cause, RM 250 per month will have more fund value after say 20 years because you pay more. If the actual performance is > BLR-2.4, then it is worthy because you gain profit. But who can guarantee it? If the BLR increases, what i pay extra to the loan account save more interest.

Friendly reminder: There are MLTA with return and there are MLTA without return. Some uses participating plan as MLTA and the premium for this kind of plan is way too high.

Do discuss more. Sorry if it is not clear as quite tired already.

you have to get exact proposal with Surrender Value stated in the proposal form. based on my Experience, i finance my MRTA of RM 6K to my loan for a loan amount of RM 242K over the period of 30 years. i'm young that time. after 5 years owning the prop, i sell it off and i cancel the MRTA policy. i got a surrender value of RM 3K.

MRTA is a reducing balance where each years coverage is reducing. in my opinion, it's good for those who are lack of fund.

if you contact Insurance Agent, they'll propose MLTA where you need to commit a sum per month. it also depend on your "Coverage Value" or so called Sum Assured. you can get a loan of RM 500K but your MLTA can go for 300K Sum Assured only. it's solely based on your decision. waht i don't like is the Monthly Commitment. How much can you get back after 10 years for your MLTA? RM 125 per month X 12 X 10 year, = RM 15K pay out for MLTA. maybe you only get back 18K at year 10th. check the surrender value in the proposal form. i dont' think it's a significant amount to get back. buying MLTA not about getting back the amount, but coverage of your Loan if there is anything happen to the borrower.

bear in mind also, MLTA means more commission for insurance agent. in my opinion, both has their advantages and disadvantages.

Me too, just completed my loan of 100k with MRTA of 2.6k for 18 year, after 5 years, had fully paid up the loan, and get back 1.3k fr AIA.

This post has been edited by youngman28: Jun 6 2012, 12:13 PM

I like Maxwealth explanation. And its true and correct... I believe MLTA or MRTA, agent both also earn commission. Just which type is suitable for you.

For me, I take life insurance to cover for my properties.my idea is that I do not over insure my properties. If I pass away, I will leave these good debts to my family with a sum of money(not full loan sum). This should be enough for them to survive and cover installment for maybe 5yrs. With the properties inherited to them, they can opt to sell or keep profiting on the rental +ve cashflow. There is no need for the properties to be fully paid off after I pass away. If you count the cost, the cost to fully insure 100% of all ur property is too high anyway.

With life insurance to cover loan, I don't have to worry about increased cost of insurance as my age grows when I buy and sell my properties. This is similar to MLTA. Your cost to buy a MRTA to cover 300k loan at ur age now and in 10yrs time is a huge differrence, that is if u have no major illnesses. At 30, u might not need medical checkup to buy insurance. At 40, u will be required to take medical checkup before they approve ur insurance. If any problem with ur health then there will be loadings and also exclusion.

My humble opinion.

This post has been edited by retkev: Jun 6 2012, 05:25 PM

Just to share my view on MRTA refund.

I'll never ask for refurn if insurance company allow to reassigned the policy. We definately keep buying, selling, refinancing, apply top up loan or even full settlement. Whenever you apply for another new MRTA/MLTA/Life insurance, the premium will be calculate on your next birthday. Which means, the insurance cost will be higher & higher. We've to understand, the MRTA/MLTA purchased will be absolutely assigned to the loan provider, they'll received the proceed money & the extra will be distribute to our heirs. Therefore, i'll request the bank reassigned the policy back to me (if the MRTA is issue by insurance company directly). As a result, my heirs will received the proceed money in full amount according to my nomination or will. Furthermore, i do not need to get another new policy with higher premium for next property investment.

Comparing MRTA/MLTA/Life insurance, it's depends on individual needs & affordability. I spent 10% of my gross income for life insurance, critical illnesses, medical card & personal accident policy. If the death & total permanent disability coverage are higher than my actual needs. The extra amount will be my mortgage protection.

Below are the breakdown for my mortgage loan protection

MRTA: 50%
Life: 30%
Employer: 20% (some may say, insurance from employer should be excluded, but to me it is still an insurance, proceed money will go to my heirs)

As far as I learned and experienced, MRTA is not re-assignable. Correct me if I missed out this piece of information.

This post has been edited by ecin: Jun 6 2012, 03:35 PM

That's 2 types of MRTA as mentioned early in this thread

Old type: usually insure by the bank itself (not re-assignable)
New type: insure by partner insurance company of the bank (UOB -> Uniasia, PPB -> ING, OCBC -> GE if not mistaken)

Those new type MRTA is re-assignable according to the insurance policy. However, most bank may not favorable to do those re-assign job.
but we can approach insurance company to process it (that's our right).

*This is the reply from staff of insurance company & i managed to do it even though given troublesome from bank. As mentioned, most bank are not favorable to do that.

BTW, please ensure the MRTA is re-assignable before accept it. Then we can fight for our right thereafter.

That's why, i prefer to approach insurance agent for MRTA than bank. But, please know what you need before approaching them, else, you'll be channel to certain expensive "fancy name" mortgage policy, but actually is a life insurance

Hi, in my humble experience,

MRTA from bank (where insurance company as the service provider, and bank as the intermediary. Bank do get paid by insurance company by promoting insurance plan. Besides that, by financing the MRTA into loan, bank gain profit as they loan extra to the borrower), after settle the loan, they will need to assign back to the owner.

It is the owner decision on whether they want to continue or not.

Most of the time, many borrower just get maybe 5-10 years of MRTA only just to qualify for the loan. Hence, the coverage is very minimum. Most of them do not even know that they can assign it for another property. Anyway, since they opt for 5-10 years, there is nothing much coverage left for another property. Hence, as general, we say it is not transferable.

Assuming a borrower, age 30 male, get a 30 years RM 500k MRTA which matches the loan tenure. And assuming he settle the loan after 15 years. That means he has 15 years coverage remaining. The coverage at year 15 might be RM 300k (it is not half)

So, if he buy a RM 300 k property, i suppose he can use the same MRTA for the new property.

However, what owner must make sure, the reducing rate is it slower than rate of outstanding loan reduces. So, we might need to consider a few factor.
1) BLR at that moment.
2) Bank package at that moment. I believe that few years back, the interest rate is like BLR+x%

Furthermore, due to inflation of currency or appreciation or property, most likely we will buy a property with a price higher than our previous property. So, assuming he is buying a RM 1mil property. We need to top up another 700k MRTA for it.

At age 45, for a RM 700k coverage taken, he need to go for full medical examination, urine full examination and blood test for HIV.

However, if he has a RM 500k MLTA since 15 years ago. He need to top up RM 500k coverage. He need to go for full medical examination only.

Assuming he is age 46, RM 700k sum assured requires him to go for blood test and electrocardiogram apart from the above requirement.

Age 46 RM 500 k need full full medical examination.

So, borrower will face such challenges in getting insured at older age.

However, if budget is a concern, and the property is for own stay, MRTA is most suitable though.

P/S: MRTA/MLTA is actually life insurance where we use for mortgage debt cancelation purpose.

So, MRTA and MLTA have their own advantages and disadvantages.
There is no wrong chosing which as mortgage coverage. It is just depending on which is more suitable for that particular individual.

P/S: There are many kind of life insurance that can be used for MLTA. Some proposed endownment, participating plan, term or investment linked. The cost decreases from endownment to investment-linked.
For what i think and calculate, i prefer getting term or investment-linked as MLTA even if that person could afford high premium endowment as MLTA

Actually approaching insurance agent for MRTA is always better than bank.

You can choose an agent you trust that can advise better. Usually banker is of no knowledge of all these and just simply ask you to dump in a rate.

The only issue is if you approach insurance company, you need to pay all these in one lump sum while getting from bank may help you refinance into loan. Although issue getting from bank is usually not transferable to another bank in the event of any refinancing with other bank (You may want to reconfirm with your bank on this)

TQ guys for sharing-s.

Personally, I already have investment link and conventional policies (review every 2 years) ... I don't feel like I would go for MLTA for my coming property ...
Perhaps, 1 day in the future when a more special evolved kind that fits, then I will

agreed with most opinion here. there is no right or wrong for MRTA and MLTA. it's all depend on individual need. but at least i learn new thing which MRTA can be transferable to another prop. great info.

Yes usually if you buy outside separately..... it can be done.

Just changing the "beneficiary" basically.

I look at it from different aspect. Yes, if bundled with loan there is interest of RM9.5K, or more if interest rate goes up. However this is to be spread over 30 years (it would be different story if you cancel the loan at early years). When time value of money is factored in, the interest payment is minimal and you are rest assured the the property is covered regardless of the high and down time in your life (bear in mind that MRTA may not fully settle the loan as the principal+interest amount are affected by interest rate, if interest rate goes funny borrower needs to pay for the increased interest payment after the MRTA claim settling the loan). MLTA would be considered as a commitment that requires you pay annually, it would be insignificant when you're sailing through later stage of your life well but life is full of surprises that bombards you with changes. Because of that, I try to put in certainties (as much as possible) in my planning and my clients' planning. Again, life is full of changes, if macro problems come in and affect my plannings, I would at least have a clear conscience to face my clients.

It all depends on how you see it

I made a calculation before in my previous posting... which you may search through my profile..

MRTA due to the interest I am committing about RM 61 per month which is also quite high as a commitment.. But it all depends on you personally..

I made that calculation and decision based on what suit me. I know I am surely going to get 1 more insurance premium in future for myself and why not I make it this 1 shot rather committing 30 years + interest for MRTA. In the event if I am going to sell the house, the surrender value is pretty minimal.

Not to forget you are entitled for tax relief. If tax relief for EPF + Life is full. You can always park 60% into your medical/education portion of maximum RM3000.

Cheers

This post has been edited by davidlow7: Jun 15 2012, 11:24 AM

I have recently did a refinance from Bank A to Bank B. Following the refinance, housing loan with Bank A was fully settled. With that, the Bank insurance unit sent me a letter saying that my MRTA policy is automatically assigned to my personal name and will be continue to be in force up to the expiry date.

What does this mean? It is better for me to cancel it and ask for refund?

I got my loan previously from hlb, mrta 5/15 due full settlement how much can get cos last time I remember only 3k plus for my mrta.

3k plus, passed for how many years already till now?
Did you get any printed copy of the reducing term amount schedule?

Passed 5 years to 5.5 years around there out of 15 years.

This post has been edited by re_freako: Sep 18 2012, 03:10 PM

I made some assumption,
assumed loan interest rate quoted: 7%, 15 years loan, 8 years done fully-settlement, rm3,500 MRTA you bought for 15-years in full (no construction period), age back then: 30+.

You should be able to get back roughly RM1k~RM1.2k.

wondering how long to get the refund?

hi all,

I finance my MRTA into the loan, currently im doing refinance, can I get back the surrender value of the remaining MRTA $?

Thanks
Chan

Yes, you get back your pro-rated premium that you've paid. If you're refinancing, your new bank has to fully pay off the bank first and then get a redemptive statement and notify the old bank to release the MRTA and then subsequently call up the insurance company that provided the MRTA to refund it to you.

Thanks lifebalance.
However, I checked with my new bank (Refinance), they said it will be lapse, as no cash value of MRTA.

Depends on how long was ur mrta tenure. If you bought a really short term mrta then chances are the pro rated premium is really low or none at all.

I would advise you to get mlta for better long term coverage and cheaper cost

It's not cash value as in MLTA. What you get back is the unearned premium.

But i check with my new banker, they say the MRTA is lapse . So which one is correct..

Thx
Chan

Lapse ?

Mrta has no lapse

Only expiry of the tenure as you've paid 1 lump sum so it doesn't lapse

MRTA will burn if refinance/ switch to other bank as there is no cash value, this is the information I got from the bank.

Furnish me the details on this to evaluate

Example if I take 100K loan, and buy 100K MRTA for 30 years.
let say during second year i pay a lump sum 50K extra to settle the loan, and I passed away on third year.
Does MRTA insurance help me to settle remained loan and refund extra amount back to my love one?

if there is balance, because MRTA, you can't put any nominee (in this case the bank is the beneficiary), so upon death, it will follow the Will. Which is why MLTA will be better because you can assign nominee of your choice.

lets say i bought mrta for 20 years. can i terminate it lets say after 2 years and buy my own insurance instead?

Yes you can, it's called unused premium.

Why not opt for MLTA instead then ? you save more money that way than buying MRTA and then 2 years later cancel it .

If not mistaken u lose atleast 15% of the unused total premium

my mrta is tied to my loan

so the bank can allow to terminate mrta? was told by my loan banker that i cant

You cannot terminate the mrta until you fully pay off the housing loan.

thanks for the info

Usually how many percent of the premium will be refunded?
I refinanced after 7 years?

Is it adviseable to increase personal insurance coverage and terminate MRTA for refinancing?

Hi all, can i terminate my MRTA and get premium refund? My MRTA is bundled with my home loan.

ady crossed the 15 days?? some banks bundle it, dun allow buyer terminate it directly with insurance company...

If within 15 days still manage to terminate it and get premium refund?

free look period still.. but usually bank will block it...

If our loan is settled earlier than the loan's maturity date, the bank will inform the insurance company to refund us the surrender value? or we need to apply for refund of the surrender value at the insurance company?

hi, bringing this thread back. same with previous post.

if we sell our property earlier, how should we claim back some of the payment

thanks.

MLTA is better but more expensive

Mrta no refund value, so it's cheaper. Term insurans

This post has been edited by ahkit123: Jul 2 2024, 08:11 PM

That's right

Yes, this got cash value life insurance

There is a form to fill, ask ur snp lawyer.

There is a form to fill notifying insurance abt the surrender n refund to account if any, ask ur snp lawyer or insurance company

This post has been edited by ahkit123: Jul 2 2024, 08:19 PM

MRTA is protect u 30 year or 35 year depend what u buy, if u can shorten fully paid or selling u condo before mature date then u can ask for refund.