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Banks usually offer to make a home loan within 30 to 35 years for you to own your dream home. Apart from home loans, the bank also offers home protection policies such as MRTA, MRTT, MLTA and MLTT to protect their interests if the borrower dies or suffers a permanent disability (Total Permanent Disability/TPD) which causes the borrower to be unable to repay the loan. This article will explain everything you need to know about these four home insurance.

What Do You Need to Know About MRTA, MRTT, MLTA & MLTT?

MRTA, MRTT, MLTA or MLTT coverage is not a mandatory coverage when buying a home. However, if you do not have this mortgage protection policy, the cost of the housing loan will have to be borne by another family member in the event of something happening to you such as death or permanent disability (TPD). Therefore, you are advised to own any of these mortgage insurance policies if you want to own a home to avoid any unforeseen situations.

Here are four types of life coverage for your home loan or mortgage including the definitions of MRTA, MRTT, MLTA and MLTT for your guidance and reference:

Mortgage Reducing Term Assurance (MRTA)

MRTA or also known as Mortgage Reduction Period Guarantee only finances excess debt. For example, if a house is bought for RM300,000 and after seven years, the loan balance is estimated at around RM230,000. If the owner dies or suffers a permanent disability (TPD), the insurance will only pay the excess loan balance of RM230,000 and the house will belong to the heirs.

However, family members or heirs will not receive any overpayment as it is not included in this policy. This MRTA coverage payment is paid in a lump sum at the beginning of the policy and usually the cost of MRTA is influenced by three factors such as Age of the borrower; Value of housing loan and Term of housing loan.