Home Loan Insurance

It is extremely important to take insurance coverage when you purchase a house. The most important factor is that it gives you and your loved ones peace of mind, in the form of financial security if an unfortunate event should occur.

Most financial institutions make home loan insurance compulsory as terms and conditions for granting home loans.

There are two important insurances to consider:

House Owner / Fire Insurance Policy

This policy provides coverage for your property against natural disasters such as flood, fire, riot, strike and malicious damage.

For properties with strata titles such as apartments or condominiums, you need not buy the insurance because the Management Corporation (MC) would have taken up insurance on the entire building.

You should ensure that you obtain the sub-certificate of the Master Policy issued by the insurance company from the MC and present it to the financial institution. This is necessary so that the financial institution is aware that the property has been insured and will not buy another fire insurance on your property.

In such a case, you will be required to assign your rights under the policy to the financial institution.

Mortgage Term Assurance

Mortgage Reducing Term Assurance (MRTA)

Mortgage Level Term Assurance (MLTA)

- Cover will reduce throughout loan tenure (cover Outstanding loan) - No cash returned - Cannot transfer when refinance / new purchase - Cover stop after loan tenure end (cover expired at aged 65) - Can finance into loan but need to pay interest - No Guaranteed to settle outstanding balance (because Outstanding balance affected by BLR fluctuation but MRTA amount no) - High initial premium (Higher premium according to aging) - No installment (One time payment) - No benefit paid upon diagnosed of 36 critical illness - An expense (a liability) - No tax relief

- Cover remain fixed throughout loan tenure (cover Principal loan) - Have cash return - Can transfer when refinance / new purchase -Cover continue after loan tenure end (cover till aged 100) -Cannot finance into loan therefore no need to pay extra interest - Guaranteed can settle outstanding balance (MLTA amount always > Outstanding balance) - Lower initial premium (Premium fixed even aging) - Can pay by monthly installment - MLTA amount will paid to settle loan upon diagnosed of 36 critical illness -An investment (an asset) - Tax relief up to RM7,000

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