Buying a home loan is an important personal finance decision for every individual. It requires financial planning and prudence since it is a major financial commitment.
If you're taking a home loan to buy a property, you will have to purchase MRTA or Life Insurance which ensures your home will be paid for should anything happen to you.
MRTA
MRTA - Mortgage Reducing Term Assurance @ Mati Rumah Tetap Ada :)
Designed to pay off the outstanding loan balance in the event that the borrower dies or suffers from total & permanent disability before the loan in fully paid off.
The coverage amount reduces with the outstanding loan amount.
It gives peace of mind of the borrower & protect the family from losing a home.
Life Insurance
Work in the same way as MRTA. The design of Life Insurance is to maintain the Lifestyle of the borrower or their next of kin and not just to pay off liabilities to the bank.
It protect the borrower against death or total permanent disability & borrowers can choose to expand their coverage to include more than death or total permanent disability such as 36 critical illness.
Borrower can choose to have saving features, where a portion of the premium paid accumulate as a cash surrender value. At the end of the tenure, borrower will receive a total premium paid plus return depending on type of life plan. Borrower also have an option to withdraw the cash value and pay the outstanding loan. It may shorten the loan tenure.
