When you take a home loan, the bank will usually ask you to get MRTA or MRTT. Both protect your family if anything unexpected happens — but many people don’t really know the difference. Here’s a simple, reader-friendly breakdown to help you choose the best one.
⭐ What Is MRTA?
MRTA (Mortgage Reducing Term Assurance) is a type of insurance that covers your home loan if you pass away or become totally disabled during the loan period.
How it works:
- You pay one lump-sum premium at the beginning.
- The coverage reduces over time, just like your loan balance.
- Once paid, you don’t have to think about it again.
Benefits of MRTA:
✔ Usually cheaper than MRTT
✔ Simple — pay once, covered for the whole loan
✔ Convenient if you have extra cash at the start
✔ Good for first-time home buyers with tight budgets
Limitations:
✘ Not Syariah-compliant
✘ Not flexible — hard to adjust later
✘ Not ideal if you plan to refinance your home in the future
⭐ What Is MRTT?
MRTT (Mortgage Reducing Term Takaful) works almost the same as MRTA, but it follows takaful principles, which means it is Syariah-compliant.
How it works:
- You can choose to pay lump sum or in installments.
- Coverage also reduces over time, following your loan balance.
- More flexible in terms of benefits and add-ons.
Benefits of MRTT:
✔ Syariah-compliant – a safer choice for Muslim buyers
✔ You can pay the contribution in installments
✔ Easier to maintain or extend if you refinance
✔ More optional riders (e.g. critical illness, hajj benefit, funeral expenses)
✔ Some plans may give a small value back (depending on product)
Limitations:
✘ Usually more expensive than MRTA
✘ If paid in installments, your monthly commitments will increase a bit
🥇 MRTA vs MRTT — Which Should You Choose?
The best choice depends on your financial planning and lifestyle. Here’s a simple comparison:
| Situation | Better Choice |
|---|---|
| You want the cheapest option | MRTA |
| You want Syariah-compliant protection | MRTT |
| You plan to refinance later | MRTT |
| You prefer to pay once, no monthly commitment | MRTA |
| You don’t have lump-sum cash to pay upfront | MRTT |
| You want extra benefits (critical illness, funeral, etc.) | MRTT |
🌱 In Simple Words
If you want simplicity and lower cost, go for MRTA.
If you want flexibility, Syariah compliance, and better long-term protection, choose MRTT.
Both will protect your family, but MRTT generally gives more flexibility especially if you expect life
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