MRTA vs MRTT: Simplifying The Complexities For Homeowner
Discover the differences between MRTA vs MRTT in our comprehensive guide. Learn how these mortgage protection tools can safeguard your family from financial burdens, make an informed choice based on your property financing type, and understand the claim process when refinancing. Get the peace of mind every Malaysian homeowner deserves.
Owning a dream home in Malaysia comes with its share of financial commitments, with home loan repayments being significant.
But don’t you worry! There are tools designed to shield you and your loved ones from any potential financial burdens in case of unexpected events.
Let’s look at two tools – MRTA (Mortgage Reducing Term Assurance) and MRTT (Mortgage Reducing Term Takaful).
In this article, we’ll untangle the knots around MRTA vs MRTT, highlight their importance, and how they can secure your long-term interests.
Getting to Know MRTA and MRTT
MRTA and MRTT might sound like complicated acronyms, but they are simply two types of insurance policies often chosen by homeowners with a home loan.
Their main goal is to protect homeowners and their families from financial stress in case of unfortunate incidents like death or disability.
As your home loan balance reduces over time, so does the sum insured under these policies.
So, what’s the real difference when it comes to MRTA vs MRTT? Let’s find out!
MRTA vs MRTT: Spotting the Difference
The distinction between MRTA vs MRTT broadly relates to your chosen property financing.
If you’re someone who has opted for conventional property financing, then MRTA could be your best fit.
On the other hand, if your property financing follows Islamic financial principles, then MRTT might be the better choice for you.
Why Should You Say ‘Yes’ to MRTA or MRTT?
The primary goal of MRTA/MRTT is to provide a safety net for you and your loved ones from potential financial stress in case of unexpected events like death or disability. In such situations, the MRTA/MRTT policy can help settle the remaining home loan, offering your family peace of mind.
Unlike some other insurance types, premiums for MRTA/MRTT are generally lower as the coverage reduces along with your decreasing home loan balance.
Easy to Get:
Compared to other insurance policies, getting your hands on MRTA/MRTT is usually easier. This can be a real blessing for older individuals or those with certain health conditions who want to secure coverage.
No Extra Worries for Heirs:
If an unfortunate event does occur, your MRTA/MRTT policy can help settle your home loan. So your loved ones wouldn’t need to stress about making these repayments.
Sharing Risk with Bank:
MRTA/MRTT policies allow you to share the financial risk of your home loan with the bank. So, if an unexpected incident occurs, the bank and the insurance company will help settle the loan, not your loved ones.
Claiming MRTA/MRTT when Refinancing: Why It Matters
Refinancing, or switching to a new loan to settle your old home loan, is a common practice for getting better interest rates or changing loan terms.
But did you know that if you’ve bought MRTA or MRTT with your old bank and decide to refinance, you might be able to claim your MRTA/MRTT from your old bank? Let’s delve into this a bit more.
For instance, you buy MRTA or MRTT with a coverage period of 35
years with the old bank, and you decide to refinance in the 10th year.
This means you still have 25 more years of coverage. So, you might have a sum of premiums that can be claimed back.
How to Make a Claim for MRTA/MRTT?
Reach out to the bank or insurance company: Contact the bank or insurance company from where you purchased MRTA/MRTT.
Ask about your policy: Ask for information about your policy and find out how much premium value is left.
Follow the procedure: Follow the steps the bank or insurance company provides to make a claim.
Why Bother Claiming MRTA/MRTT?
Why take the time to make this claim, you ask?
The answer is simple: it’s your hard-earned money!
If you don’t claim it, it’s gone. So, grab this opportunity!
Yes, the process might take some time and effort, but it could be worth it.
To know more about how MRTA can protect you, or if you want to get an MRTA or MRTT quotation from us, don’t hesitate to reach out.
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