September 05, 2023
Mortgage insurance is a key consideration when you are buying a property that can provide homeowners with peace of mind and financial security. It can help protect you and your family in the event of an unforeseen event such as death or disability. There are two main types of mortgage insurance policies: Mortgage Reducing Term Assurance (MRTA) and Mortgage Level Term Assurance (MLTA).
MRTA is a type of home loan insurance where the sum insured decreases over time in line with the outstanding loan amount. This means that as the loan is paid off, the amount of coverage decreases in proportion, and at the end of the loan term, there is no outstanding balance. By taking out MRTA, homeowners can protect themselves and their families from the burden of outstanding debts in case of unforeseen events like death, disability, or job loss.
On the other hand, MLTA is a type of home loan insurance where the sum insured remains level throughout the term of the plan. This means that regardless of the outstanding loan amount, the coverage remains unchanged over time. MLTA is designed to provide comprehensive protection to homeowners and their families in case of unexpected events like death, disability, or critical illness. By taking out MLTA, homeowners can protect their home equity and ensure that their family can continue to enjoy their home even if they face financial difficulties.
Both MRTA and MLTA have their own benefits and can be helpful for different homeowners based on their individual needs. MRTA is a good option for those who want their mortgage protection policy to gradually decrease in line with their outstanding balance, while MLTA is a good option for those who want to maintain a steady level of protection throughout the term.
When it comes to choosing between MRTA and MLTA, it is important to carefully evaluate your personal circumstances, financial goals, and long-term commitments. Homeowners can work with their financial advisor to choose the most suitable option based on their individual needs and preferences. By investing in these insurance policies, homeowners can safeguard their property and ensure that their family's future is secure.