don't buy your next house, till you see this!
DESCRIPTION
Usually housing loan is accompanied by a Mortgage Insurance like MRTA or the sort of insurance so as to cover the outstanding loan amount to be settled in the event the borrower suffers Total Permanent Disability (TPD) or death. MRTA is not compulsory but it is recommended. However, MRTA may not be an ideal solution to your home loan! Why do I say that? What if the home buyer lives through the term? Isn't it better for us to get back some (or sometimes more) than what we have paid? So, what needs to be done? You need to see the presentation to know more. Or you may also visit my website at https://sites.google.com/site/rethna18ipoh/TRANSCRIPT
AND YES TO LIFE INSURANCE
Don’t buy your next house, till you see this presentation!Click to advance …
Why buy MRTA,When you can get its benefits for FREE?
My intention is not to stop you from buying MRTA!I also think that the concept of MRTA is good.Its just that, I know of an alternative
By the way, do you know what MRTA is?
Which has all the benefits of an MRTAMinus (-) its setbacksAnd the best part is …It can be entirely FREE!
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What is MRTA?
How does this MRTA works?
MRTA stands for Mortgage Reducing Term Assurance (MRTA)
What does it mean?It’s a Term – therefore, it’s a Life InsuranceReducing – The cover reduces with timeMortgage – It is bought when getting a loan for buying a property
•MRTA is purchased when a buyer of a property is getting a mortgage loan •MRTA is purchased in a lump sum mode at the inception of a mortgage loan•MRTA supposed to (not always) settle the balance of the mortgage loan if the buyer of the property is no longer around or suffers Total Permanent Disability (TPD)
Is it compulsory?MRTA is not compulsory!
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To illustrate
Lets say a person is buying a house …
Most likely he will require a housing loan (mortgage) …
MORTGAGE LOANThis amount of loan (together with
interest) needs to be paid in monthly installments for a number
of years
MRTAIs purchased when
getting this loan in the hope to settle balance of housing loan in the
event the buyer passes away or suffers TPD
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So, is MRTA good?Of course it is. But it has a few setbacks.
Solution …
1. Firstly, know the setbacks of an MRTA2. Secondly, identify the ways to overcome its setbacks3. Thirdly, don’t buy MRTA4. Buy its alternative
Is there an alternative to MRTA?Yes.
What is it?Click to find out.
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The next few slides will at least take you 3 minutes, do you have the time to continue?
Welcome.
Oh no, just kidding.I will get to the point!
Fundamentally, the idea of MRTA is recommendable!
There is nothing wrong in its concept &
You know why I say that?
At least, little cover is better than no cover!
I am glad, you chose to continue …
So, what is MRTA again?
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Click to find out!
Because ….
It should (but not always) take care of the outstanding mortgage loan, in the event the Purchaser passed away or suffered Total Permanent Disability (TPD) before settling
his loan
&
Mortgage loans will reduce with time and as such it is not a bad idea to get a reducing cover
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But MRTA has a few setbacks!
Which Life Insurance can overcome ….
But before I go into the details of FREE insurance,Allow me to explain the setbacks of MRTABecause to know the problem, is half the solution
And, it can be entirely FREE of charge
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Setbacks of MRTA:
No 1:- MRTA cover may fall short of loan amount
Example:
Lets say the mortgage loan pay-back time is 30 years for X amount of loan.
The graph of MRTA & loan settlement looks like the following:
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RM
X
Years10 20 30
Setbacks of MRTA:No 1: MRTA cover may fall short of loan amount
MRTA
Common Mortgage loan settlement pattern
Trouble is:What if?
Something were to happen here?
This is the actual outstanding loan
The cover by MRTA is this
Who will pay for it?
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RM
X
Years10 20 30
Common MRTA
You can buy a bigger MRTA!Life Insurance can be a
better alternative !
Common Mortgage
loan settlement
pattern
Setbacks of MRTA:No 1: MRTA cover may fall short of loan amount
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But, is it cost effective?
Well, that is the number 1 setback of MRTA
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The cover of MRTA may fall short of the outstanding loan amount and …
In the event of death or TPD of the insured (under MRTA) may still have a balance of loan amount to be settled!
Setbacks of MRTA:No 1: MRTA cover may fall short of loan amount
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Setbacks of MRTA:
No 2:- MRTA has no cash surrender value & it is non-transferable
What happens to the MRTA?
1. When you sell the earlier house to buy a new one?2. When you refinance your existing housing loan?3. When you settle your housing loan?
It just gets burnt!
Why?
1. Because it’s a Term – no cash surrender value2. Its non-transferable
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Setbacks of MRTA:
No 3:- Financial Burden
MRTA premium needs to be purchased in one lump sum.
And it needs to be purchased when getting the loan.
This may sometime pose financial burden to the buyer!
Some even incorporate MRTA premium into the housing loan and end-up paying more interest!
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MRTA vs Life Insurance
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Now that we have studied the setbacks of MRTA,
Lets compare it against its alternative, Life Insurance
To know how it is a better option to MRTA!
Issues MRTALife
Insurance
1. Protection amount determined by Purchaser
2. Duration of cover is flexible
3. Cash surrender value in the end
4. Transferable to other mortgage loan
5. Provide sufficient protection if BLR increases
6. Leave a house & immediate cash to loved ones
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MRTA vs Life Insurance
Issues MRTALife
Insurance
7. Entitle for tax relief?
8. After sales service?
9. Sum Assured either remains or increases
10. Can be converted to other insurance plan
11. Sum assured reduces with time
12. Reducing protection can fall short of loan amount
13. High, lump sum contribution in the beginning
14. Incur additional interest by incorporating in loan
15. Total lost if property sold or re-financed
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*Note: Depends on the age of the Purchaser and duration maintained
This is why I said Life Insurance can be FREE!
Just in case if you have not heard before,
there are life insurance plans that gives
Guaranteed Cash Value
like AIA’s Whole Life Non-Par.
The surrender value sometimes can be more than the total premium paid!*
Click to advance …
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If you need further details,You may reach me at:016-532 1726
Or write to me at:[email protected]
If you like what I have shared with you,
You may also forward it to others!
Thank you