Malaysia Real Estate

[Homelink]

MRTA = Mortgage Reducing Term Assurance

Mortgage = Protection Plan for Housing Loan.

Reducing = Coverage based on loan outstanding, there4 if ur loan finished early, policy will be void, must try *redeem surrender value upon full loan settlement.

Term = Length of the tenure?, property type?, loan size?. i.e if u apply 30 year then the contract coverage valid for 30 year & for that specific property & the coverage will reduce according to d loan amount applied . If you do early settlement U must try *redeeem surrender value & u can't transfer to another house loan which have different loan size, diff tenure & diff property.

Assurance = Insurance Plan

* B4 redeem ur surrender value, u must obtain the MRTA certificate from bank togather with the financial discharge letter to proof that u have settled ur loan. After u got the above mention document u need to goto d respective insurance company - bankassurance dept 2 submit. Veli Mar Farn (susah).

Advantages of MRTA :
1) No Enough Money/ Financial Problem, Can finance (Subject to max 5% extra financing & also subject to income sustainable)
2) Cheap

Disadvantages of MRTA :
1) Premium financing rate @ 9% (Not based on the home loan rate)
2) Non-Transferable to other property, loan or refinancing to difference inancial institution - Not Flexible/Not Assignable.
3) Beneficiary is the bank. Normally bank keep d policy - u don't have any copy. by the time u redeem ur property u already 4got bout it.
4) Increasing premium rate for the next MRTA policy due to age increasing. (purchased another property/refinacing)
5) Surrender value? - If u settle within 5 years I think u might able 2 redeem half of the premium, else u can get few token if beyond 5 r.
6) The faster you pay, The lesser coverage you get.
7) Non-Income Tax deduction - No receipt cos is was financed
8} Coverage on start upon 1st drawdown (Money released) - U are not covered b4 any claim was made to the bank although u have sign d letter offer & loan agreement. make sure nothing happen 2 u before money release. Some Under.Construction project take up to 6 month & above b4 d 1st money was release.
9) MRTA with CI? I don't recommended. Buy separated life policy with CI. Just imagine that ur MRTA void 20/30yr from now. Ur CI coverage also viod. Plus is it cost added. Plz reconsider.
10) Coverage = All kinda of death including suicide (must b > 365days) & Total Permenant Disability - Lost of any 2 combination limbs (Eyes, Legs or Hands) Only

MRTA Important Note:
1)MRTA is a Term Life policy up to age 65 only.
2)This is not a whole life plan
3)MRTA is non-transferable plan
4)Everytime U change property/loan MRTA premium will increased

[pooh0]

I've been trying to figure out the insurance for my property - didn't elect for MRTA because of some of the reasons given by Homelink. I am going to be using term life insurance to cover the loan on the property. One disadvantage is that the amount is not a decreasing amount, but at least, I have the flexibility of paying year to year, and deciding at what point i wish to terminate the insurance.

I have come across a couple of issues, however, and would love to hear your thoughts on these points:

(1) for MRTA - when are the funds released? Upon death, I assume?
(2) What about the release of funds for term life insurance? Is it only upon probate of the estate? If this is the case, then there will be a delay, which wd not do any good to those left behind to pay off the loan.

Since i am based in Singapore, what i have done is some comparison shopping for insurance policies between Malaysia and Singapore. Banzai, and those of you who are cross-border, have you done this before? What i found is that the term life policies in Singapore are significantly cheaper than in Malaysia - (maybe it is a function of the agents used - i compared the quote given to me by a Prudential agent in Malaysia against the Aviva term insurance plan in Singapore - the difference was about 50%).

Therefore, am considering buying the insurance in Singapore to cover the amount of the loan owed in Malaysia.

(3) Who to name as the beneficiary of the term life insurance policy:

(a) if i name my company, i can deduct the premiums...but the company is subject to pay tax on the insured amount if I die (rate of 20-28% depending on the amount insured). Of course, deductability is a certainty while my death during the next 20-30 years is not as certain...

I can factor in the tax by buying the amount that is 20-28% higher than what I need, but of course, the premium is higher. main consideration here is still when the funds can be released....

(b) if i the beneficiary is my spouse, there is a provision for a section 73 trust in Singapore where if you name your spouse/kids as beneficiary, the ownership of the policy immediately goes to them - not considered part of your estate. Thus, not only do you have less of an estate subject to estate duty (there is no estate duty in Malaysia but it applies in Singapore), the monies are available almost immediately to the spouse as there is no need to wait until the will is probated. Advantage also is that i don't need to factor in the tax payable (thus lower premium). Main disadvantage is that i cannot deduct the premiums.

Any thoughts on what is the best option to take? Thanks in advance!

[Banzai]

[Homelink]

[Banzai]

[greenfields]

Just wondering... what happens if a loan is fully or partially paid up but property not redeemed from the bank and something happens to the borrower?
1. Would the family get the full amount payable under the MRTA (in the case of fully paid up loan) even though there is "no more loan" so to speak?
2. In the second scenario (where the amount payable under MRTA is more than the amount still owed to the bank), would the family get the "excess" money?

Has anyone come across this kind of case?

[Banzai]

[greenfields]

Thanks.

Guess term life is better then if you intend to pay off loan fast.

[Banzai]

debate-able whether it is better or not. But if you don't pay off earlier, then use MRTA. If you intend to, use term life. If you can't decide, then don't buy lor.

Not very good on advice tonight huh? :p

But seriously, do consider insurance for properties.

[nick1994]

edited

[goliath]

Agree with u Nick........coz I'm old and MRTA cost me a bomb.
After all my wife is going to get my life insurance money.....which is more than enough.....coz bought a lot those days......the insurance agent damn cun.
.......

[sdtiara]

Hi Homelink,

Could you elaborate on MLTA or mortgage level term assurance?

Thanks.

[mercuri]

[Homelink]

[goliath]

[nick1994]

words like poor & rich v relative........








goliath says he's poor........but he has net assets of RM 800K..........to me thats super duper rich..............2 mercuri, yah, RM 800K is poor lar.....

[mercuri]

[goliath]

Hey Nick,
I tend to agree with a lot of ur views.........but u r wrong in this case

[pooh0]

thanks for the responses. Have decided on the term life. Will try to use the company as beneficiary.

[Homelink]

Make sure u know which type of term life that suit u. There's a Level Term Life & Reducing Term Life.

[vaidaman]

I just found out that Takaful's MRTA comes with a 40-50% refund assuming there's no claim at the end of tenure. Is this true? Can anyone verify this?

[pathfinder]

If I decide to settle the loan before the loan tenure expires, should i pay rest of premium to insurance company, and bank need this settle the loan
(my loan lenght is 15 year and MRTA is 15 year too)
MRTA form Hong Leong Assurance loan for UOB.

[ianouii]

Hi there:

Nice to read up a couple of fanstatic posting here. I'm an agent from ING Insurance.

There're many differences between the 2 policies but mainly both shall be targetting the protection of the buyer & the financial institution. Honestly, if you can afford, I'd always recommend life policy as you are gaining something at the end of the day while you can take this life policy & act on your new housing loan from the same financial institution without purchasing any other plans.

so, in the long run, you're saving more rather than creating another MDTA/ MRTA. Unless you are talking buying just one properties or buying properties without getting loan.

Last, just to share one nice ING housing loan with you.
1) Fixed Rate: 6%.
2) Loan up to 90% for incomplete & completed unit.
3) No penalty for early settlement.

regards,
ian

[nick1994]

[ianouii]