Mortgage Reducing Term Assurance (MRTA) and Mortgage Level Term Assurance(MLTA).

MLTA is a slight variation from MRTA and offers an alternative for a borrower who is looking for a life insurance which offers protection plus savings and in some policies returns on the premium.

Different between MRTA and MLTA :

 

MRTA

MLTA

Purpose

Protection

Protection, Saving &


Cash Value

Protection

Reducing Protection


throughout the loan tenure.

Protection is leveled


throughout the loan tenure.

Transferability

Non transferable on New


Purchase or Refinance. Premium will increase while age increases.

Transferable. One MLTA


can be attached to Any Loan. Transferable on New Purchase or Refinance.                                                                   

Cash Value

Reducing Cash Value


throughout the loan tenure. Normally is much lower than Premium, and drop to


RM 0 at the end of loan tenure.

Fixed Cash Value


(Guaranteed) throughout the loan tenure. Policy Holder will get back the paid


premium in the future.

Nomination

Beneficiary is bank.

Beneficiary can be


anyone.

Payment

Lump Sum Payment or


financed into Mortgage Loan.

Payment Mode can be


Annually, Semi Annually, Quarterly or Monthly.

Premium

Low

High

Example on premium*

One time RM 1,186.34

RM 607.20 monthly or RM


7,286.40 yearly or RM 218,592 throughout the tenure

Example if there is no


death or TPD*

At the end of tenure


owner will received RM 0

At the end of tenure,


owner will received RM 218,592

Example if there is death


or TPD*

Insurance company will pay the loan


balance of RM 372k to the bank & beneficiary will received the home.

Insurance company will pay the loan


balance of RM 372k to the bank & beneficiary will received the home plus


RM 100k cash.

Disadvantages & Advantages on MRTA and MLTA :

MRTA's Disadvantages

MLTA's Advantages

* Protection decreases


annually Floating BLR rate = may cause unsufficienty coverage & need


continuous housing loan.

* Level Term Protection.

* No Case Value.

* Guaranteed Cash Value.

* Not Transferable To A


New Property.

* Transferable To A New


Property.

* Can't Help You Save on


Loan Interest & Shorten Loan Tenure.

* Help You Save on Loan


Interest & Shorten Loan Tenure.