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How to make use your life insurance become MRTA.

 
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zeyng



Joined: 14 Feb 2006
Posts: 3
Location: Penang

PostPosted: Wed Apr 12, 2006 3:14 pm    Post subject: How to make use your life insurance become MRTA. Reply with quote

When you buy your houses or properties. You can actually use your personal life insurance as replacement of MRTA. Just tell your Banker that you will morgage out your life insurance. In case anything happen to you yourself. The banker to claim the remainder payment on your life insurance. But there are few things you need to remember before you really use this method to save your MRTA premium.

1) Always ensure you have more than 2 life insurance on hand. One for necessary illnesses protection, second one is for add on protection (opt to have).

2) this method is good for short term properties investment. Less than 5 years investment is prefered.

3) Do not use Critical illnesses life policy to replace MRTA, what if you need this money to cure your illnesses.

Recetly I found that there is another way to save your MRTA money but at the same time u invest without affecting insurance protection. How?

I just send to those response this topic is nice manner.

enjoy.
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overtime



Joined: 03 Apr 2006
Posts: 57

PostPosted: Tue Apr 18, 2006 9:21 am    Post subject: Reply with quote

Hi Zeyng,

Am interested to find out how to save MRTA money but at the same time u invest without affecting insurance protection. Appreciate if you could enlighten us.

Many thanks.
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mydragoon



Joined: 19 Jun 2006
Posts: 215
Location: Setia Alam (2008)

PostPosted: Thu Jun 22, 2006 8:56 am    Post subject: Reply with quote

overtime wrote:
Hi Zeyng,

Am interested to find out how to save MRTA money but at the same time u invest without affecting insurance protection. Appreciate if you could enlighten us.

Many thanks.

Hi Overtime,

Hope you got your answer... Smile
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tengster



Joined: 19 Jan 2006
Posts: 1033

PostPosted: Thu Jun 22, 2006 5:32 pm    Post subject: Reply with quote

MRTA is basically to protect the buyer. It's not designed to protect the banker. Collateral of your property is to protect the banker. If you cant pay your instalment due to
loss of ability to earn, death, failed business, etc., the bank will auction your house. Banker recover thru property auction.

I see no reason why banker impose MRTA condition.

I can see those bankers with insurance arm will always insist on MRTA condition. I find it unacceptable. Impose a condition and yet they earn commission out of our MRTA purchase.

Maybe I am looking at the wrong angle. Any comment from others?



wat's ur solution?
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xen



Joined: 25 Apr 2006
Posts: 26

PostPosted: Fri Jun 23, 2006 2:54 pm    Post subject: Reply with quote

tengster wrote:
MRTA is basically to protect the buyer. It's not designed to protect the banker. Collateral of your property is to protect the banker. If you cant pay your instalment due to
loss of ability to earn, death, failed business, etc., the bank will auction your house. Banker recover thru property auction.

I see no reason why banker impose MRTA condition.

I can see those bankers with insurance arm will always insist on MRTA condition. I find it unacceptable. Impose a condition and yet they earn commission out of our MRTA purchase.

Maybe I am looking at the wrong angle. Any comment from others?

wat's ur solution?


MRTA or other insurance policies are tools to protect your property from auctioned by bank if you can't pay installment due to lost of ability to work, TPM or death (Can't protect from failed business of coz Sad )
A lot of banks impose this is because a lot of people are unaware of this risk especially for long loan tenure. To auction a customer property is not the first option for bank if they are other ways to recover their money and insurance is one method.
This is also one of the reasons why government requires us to buy car insurance before road tax is issued.
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tengster



Joined: 19 Jan 2006
Posts: 1033

PostPosted: Sat Jun 24, 2006 10:12 pm    Post subject: Reply with quote

there is risk for the bank of auctioning the defaulted property and unable to recover the cost of the loan. this is trade risk of the bank. the bank is transferring this risk to the insurer by asking house purchaser to purchase MRTA insurance at purchaser cost.
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xen



Joined: 25 Apr 2006
Posts: 26

PostPosted: Mon Jun 26, 2006 11:31 am    Post subject: Reply with quote

tengster wrote:
there is risk for the bank of auctioning the defaulted property and unable to recover the cost of the loan. this is trade risk of the bank. the bank is transferring this risk to the insurer by asking house purchaser to purchase MRTA insurance at purchaser cost.


Agree. But you can view from this angle, If I have MRTA, half way through the tenure, I lost my ability to work, I can keep the property. If not, either I lost all my previous installments or I have to depend on others(wife, sons or relatives etc) to continue paying the loan.
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Winson
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tengster



Joined: 19 Jan 2006
Posts: 1033

PostPosted: Mon Jun 26, 2006 3:18 pm    Post subject: Reply with quote

yeah xen...this could be the worst case scenario of every breadwinner......hmmmm...... Confused
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banq



Joined: 13 May 2006
Posts: 31

PostPosted: Tue Nov 13, 2007 5:25 pm    Post subject: Reply with quote

xen wrote:
tengster wrote:
there is risk for the bank of auctioning the defaulted property and unable to recover the cost of the loan. this is trade risk of the bank. the bank is transferring this risk to the insurer by asking house purchaser to purchase MRTA insurance at purchaser cost.


Agree. But you can view from this angle, If I have MRTA, half way through the tenure, I lost my ability to work, I can keep the property. If not, either I lost all my previous installments or I have to depend on others(wife, sons or relatives etc) to continue paying the loan.


Agreed with you, MRTA looks like important to protect owner and the family member and of cos included loved one.
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dopey



Joined: 30 Dec 2007
Posts: 14

PostPosted: Tue Jan 08, 2008 8:08 am    Post subject: Reply with quote

The risk to the bank is also controlled by way of the downpayment amount. The bank recovers everything first before returning any leftover equity to the buyer.

Also, was wondering if anyone thought about this, if you have already purchased 2-3 properties, let's say 150K each, and you have MRTA on all of them, then effectively that's like having term insurance value of 300-450K should anything happen to you. If so, why do people buy life insurance on top of that? The premiums for life cover is much more expensive than term too... not sure if one needs to pay for all the product features when all you need is protection.
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zemmhassim



Joined: 01 Aug 2006
Posts: 12
Location: Calgary, Canada

PostPosted: Thu Feb 14, 2008 11:41 am    Post subject: Reply with quote

I have an investment-linked life insurance from Prudential. Recently, I applied for a housing loan from PBB. Since I am only planning to serve the loan for 5 years, and I have other life insurance policies, would it be a good idea to increase my coverage (Prudential) to cover the loan amount? At least some portion of this premium will be invested, rather than signing up for new MRTA or MLTA.
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gch



Joined: 14 Feb 2008
Posts: 2

PostPosted: Thu Feb 14, 2008 4:07 pm    Post subject: Reply with quote

I too planning to do that way. but i am planning on serving the loan for 30 years. does this affect anyhting if i increase my investment link coverage...of another RM 250k?
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Scott123



Joined: 25 May 2008
Posts: 45

PostPosted: Sun Jun 01, 2008 12:08 am    Post subject: Reply with quote

This is a good suggestion that you put up here...dudeā€¦..hope that it benefits all the ones who land up here.
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