Owning a home is a major financial milestone—but it also comes with long-term obligations. If something unexpected were to happen to you, your family could be left struggling to repay the loan. That’s where MRTA coverage in Malaysia comes in. It offers peace of mind by ensuring your mortgage is settled in the event of death or permanent disability.
In this article, we break down what MRTA is, how it works, and whether it’s the right type of protection for your home loan.
What Is MRTA and How Does It Work?
MRTA stands for Mortgage Reducing Term Assurance. It is a type of life insurance that is directly linked to your housing loan. If the policyholder passes away or becomes totally and permanently disabled during the mortgage term, the insurance pays off the remaining balance of the home loan.
Quick Answer: MRTA coverage in Malaysia provides financial protection by automatically settling your mortgage if you pass away or are permanently disabled before your loan is fully repaid.
The sum assured under MRTA decreases over time, mirroring the reduction in your loan balance. This makes it a more affordable option for those seeking basic protection without the need for extra features.
Who Should Consider MRTA Coverage?
MRTA is particularly suitable for first-time homebuyers, those with fixed loan terms, or borrowers who want a simple, cost-effective solution. Because the premium is usually paid upfront—either in cash or bundled into your loan—it’s convenient and requires no further payments after setup.
If you don’t plan to refinance your property or move to another bank during your loan tenure, MRTA can be a straightforward way to ensure your family isn’t burdened with your financial commitments.
MRTA vs MLTA: Understanding the Difference
While MRTA reduces over time and is usually tied to your loan provider, MLTA (Mortgage Level Term Assurance) offers a fixed sum assured throughout the term. MLTA policies can also include savings elements or riders such as critical illness coverage, and are generally more flexible and portable.
MLTA suits those looking for added value, estate planning benefits, or protection that extends beyond the mortgage. However, it usually comes with higher premiums and long-term commitment.
Final Thoughts: Is MRTA Coverage the Right Choice?
MRTA is ideal for homeowners looking for simple, affordable loan protection. It ensures that your property remains with your family—without the stress of loan repayments—should anything happen to you.
AmMetLife offers resources and guidance to help Malaysians make informed decisions about their mortgage protection. Learn more about MRTA coverage in Malaysia and how it compares with MLTA on their website.