MLTA which stands for Mortgage Level Term Assurance is an insurance policy that is much closer to the traditional life insurance ones.
Unlike its lesser counterpart, MRTA, which is offered directly by the bank, MLTA is offered separately by external insurance providers.
As such, the policy has a wider range of coverage;
1. The borrower is protected against death or TPD and has an option for further protection of 36 critical illnesses. Borrowers can expand their coverage through this.
2. Whatever amount you’re assured of does not decrease over time.
3. You can choose to submit a portion of the premiums paid as part of a savings feature which will then accumulate as a cash surrender value.
As a result of the higher coverage, MLTAs cost more. They can be paid monthly, quarterly, bi-yearly or yearly.
MLTA is also transferable to other properties so you can use it to insure new property loans or when you refinance your current home.
The difference between MLTA and MRTA is that borrowers can adjust the sum that is assured without having to prove their health and age again.
Furthermore, its counterpart, MRTA follows the property loan instead of the owner so if you’re a property investor with multiple investments, MLTA is a much better policy to own as it has wider coverage and provides better flexibility.
Also, if the unfortunate occurs and the loan owner is stricken with TPD or passes away, MLTA not only foots the outstanding loan amount to the bank, it also gives the beneficiary or the relevant persons as dictated by the beneficiary, cash.
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