Mortgage Reducing Term Assurance comes hand in hand with home loans

if one were to apply for a home loan, they are usually required to pay for Mortgage Reducing Term Assurance (MRTA)

MRTA is somewhat similar like a normal insurance. The only difference is that, it specifies more on home loan borrowers, in case if your income does not come into play, MRTA will step in to help your family to pay off your home loan. This can be said one of the best ways to overcome it.

Most banks will insist you on buying MRTA for the benefits as mentioned above, whereas some banks might just encourage you to pay for it.

This occurs especially when you are the owner of a landed property or condos and you wish to get a home loan for it.

Before applying one, there are few things to take into account:

MRTA is important as it covers situations involving death or permanent disability. However, it only can help you pay off situations where it can be covered.

MRTA has comparatively low premiums if you were to compare with other types of insurance. Don’t be deceived by most insurance plans, as it seems to be more attractive. Try to compare it with MRTA, it can be cheaper if you include the amount of years of free coverage you’ll benefit and it will hit minimum 20% from the loan tenure.

The best part is that MRTA is transferable. If you are thinking of buying another condo or landed property, you can stick to your current MRTA. In other words, MRTA moves when you move. MRTA works well that it can transfer your remainder from your previous MRTA to the current one.

Most insurers further give you the option to set the premium payment and you are able to choose from the varieties payment schedule. It can go up to monthly payment, quarterly, yearly or half-yearly or even one-shot payment (lump-sum). It really depends on you. If you are experiencing cash flow problems, such flexibility will help you to enhance a better cash flow.

MRTA does not only cover where you apply for the respective MRTA, it covers wherever you go and it has the 24 hours worldwide coverage.

There are two types of MRTA, the shortest MRTA and the longest MRTA. If you are planning to keep your property, but later decide to sell if off in the near future, perhaps the best option to go to is to pay for the shorter term and most banks offered as short as 5 to 10 years.

If you plan on keeping your property, but later thought inheriting it to your kids, just take the longest term. It will be the same as your whole tenure of mortgage loan.

MRTA is definitely one of the most important insurance especially if you are purchasing home loan. . Check out Bank Islam Home Loan packagesif you’re thinking of applying one now.