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Mortgage Protection

Why buy Mortgage Protection ? (common name as MRTA, MDTA, MLTA)
  • We don't want the Bank to force sell our property (normally our home) when we (or rather our dependent) already suffer from misfortune. Ensure roof over head under any circumstances for your love one.
  • We need some money to meet unexpected expenses during difficulty (misfortune time), by selling the property may not be in time to get it sold, even can get it sold, may not be at a good price.
  • We want to protect our investment. Wealth preservation.

Type of Mortgage Protection:

1. Reducing protection
  • Pros
    • One time payment.
    • Can be financed by the bank
  • Cons
    • Protection is much lesser in years to come.
    • Not transferable to next investment/property.
    • No cash value at maturity.

2. Level protection
  • Pros
    • Protection level maintained even after 5, 10 or 20 years.
    • Transferable to cover another property or investment in future.
    • Cost (Premium) is keep at current rate. Unlike Reducing protection, it will be much more expensive if you buy 10 years later.
    • Cash value is higher at later stage when you don't need the protection.
    • Insurability is guaranteed. You can't guarantee your health 5 or 10 years later, right?
  • Cons
    • Higher and longer commitment. (However, you may treat it as a "Regular Saving Scheme")
    • Can not be financed by the Bank. (If can be financed, then you are paying more interest to the bank, right?)