MRTA or MLTA? Which suits you better?

Buying a home is a huge milestone, and with it comes not just the joy of ownership—but also the responsibility of protecting your investment. That’s where home loan insurance comes in. 

In Malaysia, banks often offer two main types: MRTA and MLTA. But what are they, and which one is right for you?

MRTA?

MRTA (Mortgage Reducing Term Assurance) is a life insurance policy typically tied to your bank home loan. It’s designed to pay off your mortgage in full if something happens to you—death or total permanent disability (TPD)—within the loan tenure. It is a one time premium of upfront payment and often will be bundled into the loan. The coverage reduces in tandem with your loan balance. It is viewed as a more affordable upfront cost of insurance policy.

MLTA?

MLTA (Mortgage Level Term Assurance) also covers your home loan in case of death or total permanent disability (TPD), but unlike MRTA, it offers  a fixed amount of coverage and may even include cash value or savings at the end of the term. The premiums are higher and can be paid on an annual term. The beauty of MLTA is it can be fully transferable to another loan or bank if you require to switch.

Key Differences Between MRTA & MLTA are pretty significant and it depends on your preference.  

MRTA (Mortgage Reducing Term Assurance) is a basic mortgage protection plan designed to settle your outstanding home loan in the event of death or total permanent disability. It’s typically more affordable, as it involves a one-time premium payment upfront, often bundled with your loan. The coverage reduces over time in line with your decreasing loan balance. However, they are non-transferable, have no cash value at the end of the term, and the policy’s beneficiary is the bank. It’s a straightforward option if you’re looking for minimal cost and only want coverage that matches your mortgage liability.

MLTA (Mortgage Level Term Assurance), on the other hand MRTA premiums are paid on a monthly or annual basis and the sum insured remains fixed throughout the policy term. MLTA policies are transferable, making them suitable if you plan to refinance or purchase another property in the future. There might be some cash savings value upon maturity and you are able to name your family members as beneficiaries, offering them financial support beyond just covering your mortgage. 

While MLTA tends to cost more, it gives added flexibility, protection, and potential returns — making it ideal for those who want broader financial security.

Which one fits you?  It depends on one’s priorities, choose MRTA if you simply want coverage to pay off your mortgage, or go with MLTA if you prefer flexibility, refinancing options, and a payout for your family.

Your home is your biggest asset — to have it insured provides peace of mind for you and your family. Whether you go for MRTA, MLTA, or something in between, make sure it matches your financial goals and needs.

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